European shares hit two-week low on global tech rout; earnings in spotlight

European shares hit a two-week low on Wednesday, weighed by a selloff in technology stocks that have been at the centre of equity overvaluation worries globally this week. Investors also scrutinized mixed earnings updates from the likes of Novo Nordisk, BMW and Ambu.

The pan-European STOXX 600 index was down 0.3% at 568.78, as of 0954 GMT, after falling as much as 0.7% earlier.

Technology stocks were top sectoral losers, falling 0.9%, with ASM International and BE Semiconductor down more than 2%. Meanwhile, auto and parts, which logged big losses so far this year, gained 0.8%.

Valuation fears resurfaced this week on Wall Street and in Asia that have had record-breaking runs this year, driven primarily by enthusiasm for artificial intelligence.

Comments by major US banks on Tuesday further fuelled these worries at a time when the Federal Reserve has also voiced a hawkish hold on interest rate cuts and the US government remains in shutdown.

“It’s just a combination of factors and investors are now questioning the valuations and how lofty they are, given that we don’t have any official (US) data to back the momentum,” Daniela Hathorn, senior market analyst at Capital.com said.

On the earnings front, Novo Nordisk wavered between gains and losses after the Wegovy maker lowered its full-year profit forecast. However, shares climbed 1.8% after the company accepted US government price caps for three major drugs effective in 2027.

Ambu slumped 13.4% after the Danish endoscopy solutions maker reported quarterly results below consensus, while Vestas reported third-quarter operating profit above expectations, sending shares of the wind turbine maker up 12.7%. Gains in Vestas and Novo helped beaten down Copenhagen stocks gain 1.5%.

Earnings season in Europe is halfway done and data compiled by LSEG showed that the outlook for European corporate health has substantially improved so far.

However, they underperform their US peers and falling revenues are forcing companies to increasingly consider cost savings and restructuring measures.

Nexi slid 7.3% and triggered a trading halt after the Italian payments group’s third-quarter core profit narrowly missed a company-provided consensus.

BMW boosted its core profit margin in the third quarter after further cuts to research and development spending on electric vehicles, sending shares of the carmaker up 1.8%.