European shares fall as global AI rout gathers pace
- The pan-European STOXX 600 index dropped 1.6% to 644.72 points
European shares opened lower, capping a painful week due to a global market rout and uncertainty over AI stocks after Democrats took control of the US Congress, impacting tech and other sectors.
- The impact of a Democrat-led US Congress on AI stock uncertainty.
- Specific European sectors experiencing significant declines.
- Teleperformance's substantial stock drop and revised revenue outlook.
European shares opened lower on Friday, with losses across the board as a global market rout gathered steam, capping a painful week as investors grappled with uncertainty over AI stocks after Democrats took control of the US Congress.
The pan-European STOXX 600 index dropped 1.6% to 644.72 points by 0810 GMT, with benchmarks in most major regional markets also lower by more than 1% each.
Friday’s losses wiped out its gains for the week, and it is down about 0.2%.
The STOXX 600 index was relatively less impacted this week than its Asian and Wall Street peers, given the European index’s smaller exposure to AI stocks.
Media, healthcare and retail led broad-based declines, falling over 2% each.
Fears that a Democrat-led Congress could seek curbs on AI data-centre spending added to concerns over weak returns, lofty valuations and debt-fueled investment.
A slowdown in AI spending could weigh on the global economy that has been propped up by Big Tech investments.
Tech stocks such as Siltronic lost 2% and ASMI lost 1.3%, while AI equipment makers such as Schneider Electric and Siemens Energy were marginally lower.
On the earnings front, Teleperformance tanked 18% after cutting its full-year revenue growth outlook after weakness in the outsourcing firm’s trust and safety business more than offset growth in its AI-powered and back-office services.