European shares slip as tech rout offsets earnings support

European shares inched lower on Thursday as a global rout in AI-related stocks, sparked by fears of increasing borrowing costs, dented risk sentiment, while upbeat corporate updates cushioned losses. The ‌pan-European STOXX 600 index dropped 0.16% to 636.73 points by 0901 GMT. Regional bourses were mixed, with French, British and Spanish equities trading higher.

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-outs. "The CPI pressure is still with us and that is triggering most probably some more ‌fear on long-duration stocks, for techs, and also on their financing because the tech stocks now are financing themselves in order to continue these enormous CapEx," said Michele Morganti, senior equity strategist at Generali Investments.

The technology sector dropped 2.7% and was headed for its steepest one-day drop since July, underscoring how vulnerable it remains to swings in ⁠AI sentiment. Chip ​stocks Infineon, Soitec and Aixtron dropped ⁠between 6.3% and 7.5%, while chip equipment maker ASML dropped 4.8%.

Electrical equipment makers Legrand and Schneider Electric, both seen as beneficiaries of data centre spending, declined 3.4% and 3.8%, ⁠respectively. Investors also weighed updates from Europe's corporate elite for directions.

Ericsson advanced 8.3% after the telecom gear maker reported a smaller-than-expected drop in third-quarter core profit and beat ​analyst expectations for third-quarter net sales. The gains lifted the telecom sector 1.9%, leading sector-wise gains.

Pernod Ricard added 1% after the spirits ⁠maker reported a smaller-than-expected 0.9% drop in sales for the first quarter of its 2027 fiscal year. Conversely, Mondi tumbled 10.8% after the paper and packaging firm said it raised ⁠prices ​for several paper grades in the third quarter to offset energy and raw material costs.

Antofagasta slid 6.2% after the miner reported copper production of 436,900 tonnes year-to-date, down 8.3% from the same period in 2025. The drop, along with weaker copper prices, pulled the mining sector ⁠down 2.5%.

Meanwhile, Brent crude fell more than 2% on Thursday, offering some respite to energy-dependent Europe. Traders still see an 84% chance that ⁠the European Central Bank will deliver a ⁠quarter-point rate hike in December, according to LSEG data, after it raised rates twice earlier this year to tackle inflation driven by higher energy prices.

The spotlight will also turn to French September CPI ‌data and eurozone industrial production ‌figures later in the day.