Europe stocks close higher after a global rout fueled by China AI concerns

European stocks closed higher Tuesday, in the wake of a global sell-off fueled by concerns over a potential artificial intelligence breakthrough in China that could pose a massive challenge to Western AI firms.

The pan-Europe Stoxx 600 index gained 0.5%, with the real-estate sector and utilities leading gains, both up by 1.1%. Consumer staples rose up by around 0.9%.

Biopharmaceutical firm Sartorius was the top performer on the index, gaining 11.5% after the company said in a preliminary full-year release that it had met profitability targets and had a “cautiously positive” outlook for 2025.

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Regional markets traded in negative territory on Monday as investors in the region reacted to a potential AI breakthrough out of China, with the success of Chinese artificial intelligence startup DeepSeek sparking concerns over incumbent U.S. giants’ global leadership in AI.

Later on Wall Street Monday, the S&P 500 and Nasdaq Composite plunged amid concerns that an artificial intelligence stock bubble would pop because of DeepSeek‘s emergence, which has possibly made a competitive AI model at a fraction of the cost of Silicon Valley models.