European shares flat as defensives limit commodities slump

By Avinash P and Johann M Cherian

Feb 2 (Reuters) – The STOXX 600 index was flat on Monday, as losses in commodity-linked stocks were offset by gains in defensives such as consumer staples stocks, while investors also assessed several earnings reports to ‍gauge the health of corporate Europe.

The pan-European STOXX 600 was flat at 1017 GMT after falling as much as 0.7% earlier in the day.

Basic resources led sectoral decliners with a 1.6% drop and was on track for its biggest two-day drop since early August 2025.

Gold, silver and industrial metals deepened their losses, as U.S. President Donald Trump’s nomination of Kevin Warsh as the next U.S. Federal ‌Reserve Chair on Friday set off a wave of selling in ‌risk assets. Investors see Warsh as more hawkish, reducing metals’ allure.

Michael Field, chief European equity strategist at Morningstar said that the gold trade was “unwinding a little”. “But it just means that this leg of the (gold rally) story at least, seems to be finished,” he added.

Signs of geopolitical tensions easing between ​the U.S. and Iran also sparked a selloff in crude prices, sending European energy stocks down 1.3%.

The risk-off mood had investors piling into sectors that are expected to fare ‍better in economic downturns. The food and beverage sector ​rose 1.1% with companies such as Danone and Carlsberg helping offset broader ​market losses.

The STOXX 600 had a strong start to 2026 and has added 3% so far ‍this year, outperforming the U.S. benchmark S&P 500’s 1.4% gain. Much of Europe’s outperformance has been underpinned by rallying commodity and defence stocks, and also assisted by a few positive corporate earnings updates.

INVESTORS ASSESS EARNINGS

Earnings also were in focus in Europe as investors looked for clues on how companies were faring at a time when the macroeconomic outlook is ‍clouded.

Swiss bank Julius Baer lost 3% after reporting a 25% decline in net profit for 2025, hurt by writedowns.

BFF plunged 45% after the Italian bank announced its CEO was stepping down and ‍cut 2026 financial targets.

“Investors are ‍really trying to get a steer on whether they should still ​be invested in banks… whether (European banks) are still performing solidly and ​immune to ⁠some of the geopolitical conditions or they should be switching somewhere ‌else” Morningstar’s Field said.

Barry Callebaut slipped 1.2% after a Reuters report said former CEO Peter Feld left last month after a previously unreported clash at the top of the world’s largest chocolate maker over a proposal to separate its cocoa business.

French IT company Capgemini gained 1.4% after saying it will sell its U.S. subsidiary Capgemini Government Solutions.

(Reporting by Avinash P and Johann M Cherian in Bengaluru; ⁠Editing by Eileen Soreng)