FRANKFURT: European shares were little changed on Wednesday with losses in technology stocks offsetting strong performance from basic resources amid lingering concerns over sky-high, AI-fuelled tech valuations.
UK markets, meanwhile, advanced after inflation data firmed rate cut bets.
The pan-European STOXX 600 closed flat at 579.84, after trading close to record highs during the day.
Major regional bourses were mixed, with the UK’s FTSE 100 adding 0.9 percent while Germany’s DAX and France’s CAC 40 dipped 0.5 percent and 0.3 percent, respectively. British consumer price inflation fell unexpectedly sharply in November, data showed, prompting investors to add to bets for an interest rate cut on Thursday.
Banks were a big boost to the STOXX 600, up 1 percent and trading close to levels last seen in 2008. London’s HSBC added 2.7 percent after hitting a record high earlier with traders pointing to a broker rating upgrade on the stock.
“For the next year, we remain constructive on equities globally. We have diversified our portfolio, because we think it’s important not to be too concentrated on US tech,” said Amelie Derambure, senior multi-asset portfolio manager at Amundi.
“Monetary policy is going to be supportive or neutral, we don’t believe there will be hikes in most developed countries … and we expect a tailwind coming from the fiscal support in Germany.”
Tech shares fell 1.7 percent with semiconductor companies ASML Holdings, BESI and ASMI in the red.
Construction and materials and automobiles also came under pressure.
The STOXX 600 has rallied nearly 15 percent this year, aided by falling interest rates across the continent and global investors diversifying away from premium-valued US tech stocks.
Several monetary policy decisions are on the radar this week, including those by the European Central Bank (ECB), Sweden’s Riksbank, Bank of England, and Norway’s Norges Bank. Among individual stocks, London-based Bunzl fell 2 percent after the business supplies distributor forecast a slight year-on-year drop in its 2026 operating margin.
Serco topped the STOXX 600 with a 7.4 percent gain after the outsourcing firm forecast profit ahead of analyst expectations for this year and next.
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