FRANKFURT: European shares slid on Friday and registered a weekly decline as concerns over stretched tech valuations came to the fore again, while defence stocks weakened amid signs of possible progress toward ending Russia’s war in Ukraine.
The pan-European STOXX 600 fell 0.3 percent to 562.1 points, after hitting its lowest since late September earlier in the session. The index logged its biggest weekly drop since late July.
Germany’s DAX, down 0.8 percent, hit a six-month low earlier. Spain’s IBEX lost 1 percent.
In the US, tech stocks steadied in choppy trade after dragging markets a day earlier, while sentiment improved as traders boosted bets on an interest rate cut by the Federal Reserve next month following remarks from policymakers.
European tech stocks dropped 2.3 percent to hit their lowest since mid-September. ASML, ASM International, and BE Semiconductor lost between 4.6 percent and 6.3 percent.
Axel Rudolph, senior technical analyst at IG Group, said “the whole day European markets have just been underwater,” attributing that to the drag by tech stocks as worries over sky-high valuations in the US persisted. US trading was extremely volatile on the day. [.N}
AI beneficiaries Schneider Electric and Siemens Energy slid 2.7 percent and 10.1 percent, respectively.
Meanwhile, investors were also monitoring developments around a new US-drafted plan to end the Russian war in Ukraine that would involve downsizing Kyiv’s military and major territorial concessions. President Volodymyr Zelenskiy said he would not betray Ukraine’s interests.
Europe’s defence index has been declining since early October and on Friday it fell 3.4 percent to hit its lowest since August. Renk was down 8.4 percent and Rheinmetall was off 7.2 percent.
An index tracking investor nervousness spiked 2.7 points to 24.56, hitting its highest since mid-May.
Mining stocks declined 1.3 percent, and industrial stocks lost 1.3 percent, with Thyss-enkrupp falling 9.2 percent.
Bucking the trend, food and beverage stocks, which investors flock to in times of economic and market uncertainty, rose 2.1 percent. Healthcare stocks added 0.8 percent.
“Out of tech into defensive stocks — that’s where investors seem to be heading as uncertainty over Fed policy and inflation keeps markets on edge,” Rudolph added.
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