European Stocks Decline Amid Tech Sell-Off
- European stock markets closed with losses on Wednesday, continuing a downward trend observed in previous sessions.
- The decline was notably driven by a fall in technology shares and concerns over inflation in the UK.
- Investor confidence is shaky as rising inflation influences expectations for potential interest rate cuts.
LONDON — European stock markets experienced a downturn on Wednesday, reflecting a continuation of negative sentiment from previous trading sessions, particularly in the technology sector. The Stoxx 600 index provisionally closed 0.43% lower, with most major exchanges in the region following suit. Technology stocks were notably affected, plummeting 4.4%, paralleling a sell-off in the U.S. where the Nasdaq Composite fell 2%. Dutch semiconductor giant ASML saw its shares drop 10.9% despite reporting better-than-expected second-quarter earnings, as concerns over tighter U.S. export restrictions weighed heavily on the global chip market. In the U.K., inflation data released by the Office for National Statistics indicated a 2% annual rate for June, slightly above the anticipated 1.9% but consistent with May's figures and the Bank of England's target. This inflation reading prompted the British pound to rise above the $1.3 mark against the U.S. dollar for the first time in a year. The market's reaction to the inflation data led to a reduction in expectations for an August rate cut by the Bank of England, with bets decreasing from 50% to around 35% due to persistent services inflation. Analysts are optimistic about the potential for growth-friendly policies and political stability in the U.K. following the election of a new Labour government. Meanwhile, in Asia-Pacific markets, trading was mixed, with Australia's S&P/ASX 200 reaching an all-time high, showcasing regional disparities in market performance.