By Johann M Cherian
Nov 3 (Reuters) – Europe’s benchmark equities index slipped on Tuesday, with technology stocks among the biggest drags as concerns about the outlook for AI trade weighed on sentiment, while reports of escalating Middle East tensions further dampened risk appetite.
The pan-European STOXX 600 index fell 0.4% to 647.13 points by 0955 GMT.
The technology sector lost 1.6%, with STMicro and ASML down more than 1.1%, respectively. Siemens Energy shed nearly 1%.
Asian tech benchmarks came under pressure earlier in the day as investors reassessed the sustainability of the AI-driven rally following disappointing results from major US hyperscalers in the previous week, raising concerns that the sector has become overvalued globally.
Tech giant Apple’s dour gross margin forecast for the crucial holiday quarter added to the cautious mood.
In Europe, however, Gilles Guibout, head of European equities at BNP Paribas Asset Management, said valuations have cooled, while earnings dynamics is still positive.
“We would rather be on the buy on the weakness mode for the time being, because we don’t think that those investments would be questioned. We could have some projects that could be delayed, but by and large, what we are seeing is that all the investments are fuelled by the need for more compute.”
Reflecting that demand, UK’s Drax jumped 9% after the power firm partnered with Brookfield and AI infrastructure platform Radiant to develop a data centre in a project that could attract more than £20 billion ($26.8 billion) in investment.
Bayer gained 4.4% and after the German pharmaceuticals and agriculture group raised 2026 profit forecast. Healthcare is seen as a good portfolio diversifier against AI-fuelled market volatility.
Meanwhile, the US carried out strikes on Iran’s Qeshm Island in the Strait of Hormuz, a US official said, a day after Iran signalled openness to peace talks.
Brent crude prices gained 1.3% to more than $100 a barrel, bouncing back from a 7% fall in the previous session. Global markets also braced for the outcome of pivotal US midterm elections on Tuesday.
Guibout said a win for the democrats in the US could cloud the outlook for further AI investment to which some European companies are exposed.
Lufthansa gained 3.3% as analysts pointed to broadly resilient results, even as the carrier trimmed its annual profit forecast.
Philips gained 4.3% after reaching a preliminary agreement with the US Department of Justice to end investigations linked to the Dutch company’s 2021 global recall of sleep and respiratory-care devices.
Sportswear maker Adidas dropped 2% after brokerage UBS downgraded to “sell” from “neutral”.
(Reporting by Johann M Cherian in Bengaluru; Editing by Sonia Cheema and Shilpi Majumdar)
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