European Retail Surge Defies Global Tech Tumble

European shares peaked on Tuesday, driven by retail sector gains following DeepSeek's AI-induced market turmoil. Despite tech sector pressure, positive moves by engineering and finance firms buoyed indices. Investors eye U.S. and ECB interest rate decisions, while Spain's economic performance impresses amidst regional challenges and geopolitical issues.

European shares displayed resilience on Tuesday, closing at an all-time high as retail stocks sparked a rebound from Monday's global market turmoil triggered by the Chinese AI firm DeepSeek.

The pan-European STOXX 600 index climbed 0.4%, led by retailers who saw a collective increase of 2.1%. Prominent names like JD Sports, Kingfisher, and Howden Joinery benefited, trading up by as much as 3.2%. Meanwhile, technology stocks showed minor recovery with a 0.3% uptick, assisted by Alten's impressive 7.7% rise post-earnings report.

However, the session wasn't without exceptions. AI-related stocks continued their decline, with ASM International and Schneider Electric dropping 3.7% and 7.5%, respectively. DeepSeek's burgeoning AI model previously unsettled tech investors, leading to significant sell-offs. This week, investor attention shifts to crucial rate decisions by the Federal Reserve and ECB, with expectations of a quarter-point cut from the latter, as analysts weigh future monetary policies.

(With inputs from agencies.)