Europe close: FTSE outperforms amid AI, Iran strike fears
By Josh White
Date: Friday 27 Feb 2026
(Sharecast News) - European shares edged higher on Friday, with the pan-European Stoxx 600 closing up 0.11% at 633.85 after touching a fresh intraday record of 636.16 in morning trade.
The gains came despite a weaker lead from Wall Street overnight, where a sharp slide in Nvidia weighed on the Nasdaq even after the chipmaker delivered record quarterly results.
"Most global stock indices were jittery ahead of the weekend with a US attack on Iran looming, the exception being the FTSE 100 which hit its third straight record high in as many days amid rising oil and precious metal prices, benefitting its constituents," said Axel Rudolph, chief technical analyst at IG.
He added that "US wholesale prices rising more than expected also weighed on US indices which declined for a second session in a row as investors reconsidered positions on major AI infrastructure companies following Nvidia's earnings."
Germany's DAX slipped 0.02% to 25,284.26 and France's CAC 40 fell 0.47% to 8,580.75, while London's FTSE 100 outperformed with a 0.59% rise to 10,910.55.
Patrick Munnelly, market strategy partner at TickMill, said "London's FTSE 100 surged to a new record high on Friday, marking its eighth consecutive monthly gain, driven by strong performances from heavyweight mining stocks," noting that "safe-haven demand for commodities like gold and copper intensified amid ongoing concerns over US tariff policies and rising tensions between the United States and Iran, boosting both precious and industrial metal miners."
Rudolph added that with the US having called on its citizens to leave Israel and Iran, "the threat of an attack on the Islamic Republic has dramatically risen, pushing the oil price to a seven-month high," while precious metals also rallied on haven flows.
German labour market fragile as inflation slows
In economic news, German labour market data showed continued fragility.
The seasonally-adjusted unemployment rate held at 6.3% in February, its joint highest level since September 2020 and unchanged since March 2025.
The number of unemployed rose by 1,000 to 2.977 million, slightly below the 2,000 increase expected.
Andrea Nahles, head of the Federal Employment Agency, said the labour market was still struggling to gain momentum at the end of the winter break.
On a non-seasonally adjusted basis, unemployment fell by 14,700 to 3.07 million, though ING warned that "the fact that the absolute number of those unemployed remains above the politically-important three million is anything but good news," adding that a gradual worsening is likely to continue through the year.
Separate figures from Destatis showed German inflation slowed more than expected, with the annual consumer price index easing to 1.9% in February from 2.1% in January, dipping below the European Central Bank's 2% target for only the second time in 17 months.
Services inflation held at 3.2%, goods inflation eased to 0.8% from 1.0%, food price growth slowed to 1.1% from 2.1%, and energy price deflation deepened to -1.9%.
Core inflation was unchanged at 2.5% for a second consecutive month.
In the UK, GfK's consumer confidence index fell three points to -19 in February, returning to its November 2025 level.
Measures of personal finances over the past year and next year both dropped four points, while the major purchase index declined to -14 from -10 and the savings index fell to 21 from 28.
Neil Bellamy, consumer insights director at GfK, said weaker perceptions of personal finances were driving the decline, noting that although inflation was easing, prices continued to rise and unemployment had reached its highest level in nearly five years, increasing concerns about job security.
UK vehicle production also weakened sharply at the start of the year.
According to the Society of Motor Manufacturers and Traders, 65,249 cars were built in January, down 8.2% on December, while commercial vehicle output fell 68.6% to 2,166 following a major plant restructuring.
Overseas shipments, which account for more than three quarters of output, were particularly weak, with car exports down 10.1% and commercial vehicle exports down 75%.
Chief executive Mike Hawes described it as a "disappointing start" and called for a forward-looking trade agenda and more competitive manufacturing conditions.
Despite the setback, overall car production was forecast to rise more than 10% to 790,000 units this year as next-generation electric vehicle production ramped up.
Across the Atlantic, US producer price data pointed to persistent inflationary pressure.
Core PPI rose 0.8% in January, above expectations for 0.3% and up from 0.6% in December, while headline PPI increased 0.5%, also exceeding forecasts.
On an annual basis, core wholesale prices were up 3.6% and headline PPI 2.9%, both above the Federal Reserve's 2% target, with services prices jumping 0.8% over the month.
Melrose tanks, Acciona in the green
In equities, shares in Melrose Industries fell 12.03% despite reporting higher profits, while Barclays dropped 4.65% amid reports of £600m exposure to insolvent mortgage lender Market Financial Solutions.
Banco Santander declined 2.78% on similar financing links.
On the upside, Acciona surged 12.28% after reporting a 90% rise in net profit, and Swiss Re gained 3.74% after announcing a record $4.8bn profit for 2025, up 47%, alongside a $1.5bn share buyback plan.
Reporting by Josh White for Sharecast.com.
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