FRANKFURT: Europe’s STOXX 600 ended marginally lower on Tuesday, retreating from a one-week high, after a sharp selloff in chip stocks overshadowed optimism from lower oil prices.
The pan-European benchmark dipped 0.1 percent to 635.01 points at the close. London’s FTSE 100 fell 0.06 percent, while Germany’s DAX and France’s CAC 40 were down 0.07 percent each.
The decline snaps a two-day winning streak for the STOXX 600 and shows how sensitive investors remain to shifts in AI sentiment.
Reports that China’s CXMT had made some progress on chip design stoked competition fears and weighed on chip stocks globally.
“The news also provided investors with an excuse to cut their exposure to AI-adjacent companies,” said David Morrison, senior market analyst at Trade Nation.
Computer chip equipment maker ASM International fell 6.3 percent and was the biggest laggard on the STOXX 600. French chip materials maker Soitec slipped about 6 percent.
Oil prices fell, providing some relief as traders assessed supply risks following attacks on Saudi Arabia and weighed the prospect of additional diesel supplies from Russia.
However, the Middle East conflict has stoked inflation fears in the energy-importing region and dimmed the appeal of riskier equities.
“European equities are caught between resilient corporate earnings and rising borrowing costs,” Lauren Hyslop, investment manager at Mattioli Woods, said.
The chemicals sector climbed 2 percent to lead sectoral gains, while the aerospace and defence index slipped 1.7 percent. Technology stocks lost 1.6 percent.
Luxury stocks fell 0.6 percent after LVMH, the world’s largest luxury group, posted weaker-than-expected third-quarter sales, as deteriorating consumer sentiment in China weighed on demand for its Louis Vuitton and Dior brands.
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