FRANKFURT: Europe’s benchmark share index gave up early gains to close lower on Thursday, weighed by a selloff in technology stocks as results from Germany’s SAP and US-based Microsoft failed to impress investors.
The pan-European STOXX 600 eased 0.2 percent to 607.14 points, with the technology sector falling 2.8 percent in its biggest daily drop since April 2025, when US tariff hikes sparked a rout in global markets. Germany’s DAX underperformed other regional indexes, closing 2 percent lower as SAP slid 16 percent after its annual cloud revenue forecasts failed to meet market expectations. The German enterprise software maker’s shares logged their steepest drop since 2020.
Investors have been scrutinising tech results for clues on how companies are monetising artificial intelligence, having spent billions on developing the technology in recent years.
“A lot of it is about the guidance for the future and concerns about whether we can see the same pace of growth going forward,” said Marija Veitmane, head of equity research at State Street. On Wall Street, investors sold shares of Microsoft and ServiceNow after their respective results also fell short of expectations.
Still, Veitmane said investors should not diversify out of the US and out of technology stocks because that’s one area where profitability is unmatched.
Earnings in the US tech sector are expected to have increased 28.2 percent year-on-year in the previous quarter, compared to an 8.3 percent decline for their European peers, according to data compiled by LSEG.
Geopolitics also kept markets on edge, with the euro STOXX volatility index spiking 2.3 points. The US threatened to attack Iran again and concerns about disrupted supplies from the oil-rich region lifted crude prices 3 percent to six-month highs.
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