European Shares Shine Amid AI-Fueled Market Recovery

European shares reached new highs, led by retail and utilities sectors. The STOXX 600 index rose 0.7%, while tech stocks rebounded after DeepSeek's AI model induced a market dip. Key corporate earnings and improved consumer confidence contributed to investor optimism. Rate decisions from major central banks are awaited.

In a remarkable recovery, European shares soared to unprecedented heights on Tuesday, spearheaded by robust performances in the retail and utilities sectors. This surge followed a day of market turbulence stirred by the Chinese AI startup, DeepSeek.

The widely tracked pan-European STOXX 600 Index climbed 0.7%, narrowly surpassing its previous all-time high set on January 24. Retail stocks experienced notable gains, with JD Sports, Kingfisher, and Howden Joiner each rising more than 3%.

The technology sector, which had been shaken by DeepSeek's disruptive AI model, showed resilience as well, posting a 0.6% increase. The positive sentiment was buoyed by strong earnings reports from various companies and improved consumer confidence, setting an optimistic tone ahead of central bank announcements.

(With inputs from agencies.)