European equities climbed to a fresh record on Wednesday, supported by a rebound in banking shares after HSBC (LSE:HSBA) lifted a key lending target, while investor worries about rapid disruption from emerging artificial intelligence models showed signs of easing.
The pan-European STOXX 600 index rose 0.4% to 631.6 points by 08:24 GMT, after briefly touching an intraday record of 632.40 earlier in the session. Banking stocks advanced by more than 1% as global sentiment improved following announcements from U.S.-based AI startup Anthropic, which partnered with several companies and introduced new AI plug-ins — developments seen as evidence that established businesses are adapting to AI rather than facing immediate displacement.
Financial institutions are often viewed as particularly exposed to technological disruption. However, indications that companies are integrating AI gradually helped calm concerns about potential margin pressure, improving risk appetite and supporting gains in the banking sector.
Similar fears around AI-driven disruption have triggered episodes of volatility in global markets several times this year, including sharp declines in European banking stocks during Tuesday’s session.
Market sentiment was further lifted by HSBC, Europe’s largest lender, which raised an important earnings target after reporting annual profit above expectations despite booking a $4.9 billion one-off charge.
Among individual movers, onshore wind turbine manufacturer Nordex (TG:NDX1) surged 11.6% after delivering better-than-expected core profit for 2025.
In contrast, Diageo (LSE:DGE) fell 6.5%, weighing on the broader index after the drinks group lowered its annual sales and profit outlook for the second time in four months and announced a dividend reduction.
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