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Sartorius jumps after better-than-expected Q4 earnings

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Siemens Energy rises after Q1 revenue beat

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Italian stocks slip with PM Meloni under investigation

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STOXX 600 up 0.4%

(Updates after markets close)

By Nikhil Sharma and Johann M Cherian

Jan 28 (Reuters) - European shares closed at a record

high on Tuesday with retail stocks leading broader gains, as

selling pressures ebbed a day after the Chinese AI startup

DeepSeek triggered a global market rout.

The pan-European STOXX 600 closed up 0.4%, with

retailers leading sectoral gains with a 2.1% rise.

JD Sports, Kingfisher and Howden Joinery ( HWDJF )

were trading between 1.3% and 3.2%.

The European technology index, which took a hit in

the previous session, edged up 0.3%, with engineering and

technology consulting group Alten in the lead with a

7.7% rise after reporting annual results.

However, AI-related stocks such as ASM International

and Schneider Electric dropped further by

3.7% and 7.5%, respectively.

DeepSeek's discount artificial intelligence model and its

soaring popularity rattled investors globally on Monday, who

dumped technology shares and questioned the sky-high valuation

of AI bellwethers.

Investor focus is also on interest rate verdicts from the

U.S. Federal Reserve and European Central Bank later in the

week.

With a quarter-point rate cut already priced in for the ECB,

all eyes will be on policymakers' remarks to set the tone for

the easing cycle for 2025.

"Based on recent ECB speakers, the next two cuts seem to be

consensual now, but the path thereafter not. Our view remains

that data will ultimately force the ECB to continue cutting to a

terminal of 1.5% if not lower," said a team of Bank of America

Global Research analysts led by Ruben Segura-Cayuela.

EUROPEAN BANKS

Sartorius jumped 11.5% to top the STOXX index

after the German pharmaceutical equipment supplier reported

better-than-expected fourth-quarter earnings as well as strong

bioprocess solutions orders.

Siemens Energy rose 7.5% after the offshore wind

turbine maker reported a preliminary first-quarter revenue above

market expectations.

The company, which also provides electric hardware for AI

infrastructure, slumped 20% on Monday.

Spain's unemployment rate in the fourth quarter fell to its

lowest in more than 16 years, as the economy outperforms its

neighbours. The IBEX benchmark index rose 1.3% to touch

a 15-year high.

In Italy the main index dipped 0.1% after Prime

Minister Giorgia Meloni said she had been placed under judicial

investigation over her country's surprise release of a Libyan

police officer wanted by the International Criminal Court.

European bank earnings on Thursday will also be a key event

for the markets as investors worry that U.S. President Donald

Trump's administration will slash red tape for U.S. banks,

potentially disadvantaging European institutions.

Netcompany Group slumped 16.9% after the IT

consultancy firm posted fourth-quarter revenue below market

expectations.