FRANKFURT: European shares dropped on Friday, hammered by a global tech selloff that shaved billions off the market values of some chip heavyweights, ending a largely strong month on a sour note.
The pan-European STOXX 600 index closed 0.36 percent lower at 646.75 points, despite recording its best month since June.
Results from Amazon and Intel in the US rekindled concerns about the high costs of building out AI infrastructure and prompted a pullback from technology names worldwide.
“The message from investors is becoming clearer: strong AI demand is no longer enough on its own,” Daniela Hathorn, senior market analyst at Capital.com, said.
The European technology sector index fell 2.75 percent for its worst day since July 7 and led sectoral declines. AT&S, Soitec and Technoprobe led losses on the STOXX 600, with declines ranging from 9 percent to 13 percent.
Robust earnings in Europe this quarter have offered some support to stocks, but the drop on Friday shows how quickly bullishness can evaporate if global sentiment shifts.
Separately, data showed the euro zone economy grew faster than predicted last quarter, displaying exceptional resilience to headwinds from expensive energy, even as surging borrowing costs and rapid inflation cloud the outlook.
Additionally, French consumer prices rose more than expected in October, recording the highest inflation rate since December 2023.
Investors are already grappling with political unrest in the euro zone’s second-largest economy, at a time when the country faces mounting pressure from elevated government debt, driving French bond yields to multi-year highs.
Universal Music Group jumped 7.89 percent, topping the STOXX 600, after posting a pick-up in subscription streaming revenue in the third quarter. The media sector rose 1.63 percent.