European Shares Subdued Amid AI Stock Valuation Caution

European shares held steady as global AI stock valuations prompted caution, with attention on a NATO summit in Turkey for new defence contracts. The STOXX 600 index remained flat, while the technology sector led declines. Defence stocks saw marginal gains amid anticipated NATO announcements.

On Tuesday, European shares remained subdued, with global AI-related stock valuations causing investors to exercise caution. Meanwhile, attention turned to a NATO summit in Turkey, where potential announcements of new defence contracts were expected.

The pan-European STOXX 600 index stayed flat, closing at 650.84 points by 0713 GMT, following previous session's dip from record highs. The technology sector led the declines, dropping by 1.6%, significantly impacting global tech stocks.

Among the losers, ASML and Infineon both saw 4% drops, with Siemens Energy plunging 5.5% after a downgrade from Barclays. Conversely, the defence sector saw marginal gains, buoyed by optimistic expectations from the NATO summit. Notably, Sweden's Saab jumped 5.3% following an upgrade from Morgan Stanley while Shell gained 2.2% on improved second-quarter gas outlooks.