European shares suffered a setback on Friday, dragged down by lower commodity prices and a global technology share rout. Airlines, media firms, banks, and telecom companies worldwide reported disruptions due to system outages.
The pan-European STOXX 600 index dropped 0.6% by 0834 GMT, hitting a two-week low amidst a broad sector selloff. Travel and leisure stocks experienced the most significant drop at 2.6%, led by a 9.3% plunge in Evolution shares. Miners declined by 2.1%, heavily impacting the benchmark index, spurred by decreased commodity prices following the absence of Chinese economic stimulus.
German shares fell 0.9%, aligned with a 1.6% annual decline in producer prices for June, meeting analysts’ forecasts. The market faced a fifth straight session of losses as investors contended with U.S. political upheavals and stringent trade regulations affecting tech shares. The technology sector plunged 0.7% on the day, marking a weekly loss of over 7%.
‘It’s a perfect storm of the U.S. tech sector rotation impacting Europe, coupled with European earnings disappointments,’ said Ben Laidler, head of equity strategy at Bradesco BBI. Uncertain policy directions from the European Central Bank added to investor anxiety.
In related news, LSEG Group’s Workspace platform experienced a global outage, adding to market disruptions. Laidler remarked, ‘Investors are already jittery over tech rotations, and this outage further heightens uncertainty.’ Meanwhile, Sartorius dropped 11.8% as it cut its full-year guidance owing to the outage.
Conversely, Danske Bank surged by 7.3% after exceeding second-quarter net profit expectations due to strong credit quality and increased net interest income. Electrolux gained 2.7% after surpassing quarterly operating profit estimates through cost reduction measures.
(With inputs from agencies.)