European shares fall as global tech rout hits risk appetite

European shares fell on Thursday as sentiment took a hit from ‌a global rout in tech stocks, sparked by fears of increasing borrowing costs.

The pan-European STOXX 600 index dropped 0.35% to 635.54 points by 0709 ‌GMT. Tech stocks from New York to Seoul were rattled after ‌hot US inflation data on Wednesday stoked fears of further Federal Reserve rate hikes, hitting companies that rely on debt to fund AI infrastructure build-out.

"In terms of the ⁠catalysts, ​several names most ⁠exposed to AI have already been under mounting pressure in recent days. Moreover, this pressure ⁠started to be noted more widely, particularly among those firms that have ​been heavily scrutinised by credit investors given their large capex needs," Deutsche ⁠Bank said in a note. The technology sector dropped 3.2%, showing how vulnerable it remains ⁠to ​swings in AI sentiment.

Meanwhile, the ongoing earnings season provided some reassurance. Ericsson advanced 9.9% after the telecom gear maker reported a smaller-than-expected ⁠drop in third-quarter core profit as efficiency measures helped offset higher component costs.

Pernod Ricard ⁠added 3.2% ⁠after the spirits maker reported a smaller-than-expected 0.9% drop in sales for the first quarter of its 2027 ‌fiscal year.