European shares fall as global AI rout gathers pace

European ​shares opened lower on Friday, with ​losses across the board ‌as a ​global market rout gathered steam, capping a painful week as investors grappled with uncertainty over AI ‌stocks after Democrats took control of the US Congress.

The pan-European STOXX 600 index dropped 1.6% to 644.72 points by 0810 GMT, with benchmarks in most major regional ‌markets also lower by more than 1% each. Friday's losses wiped ‌out its gains for the week, and it is down about 0.2%. The STOXX 600 index was relatively less impacted this week than its Asian and Wall Street peers, given ⁠the ​European index's smaller exposure ⁠to AI stocks.

Media, healthcare and retail led broad-based declines, falling over 2% each. Fears that ⁠a Democrat-led Congress could seek curbs on AI data-centre spending added to concerns ​over weak returns, lofty valuations and debt-fueled investment.

A slowdown in AI spending ⁠could weigh on the global economy that has been propped up by Big Tech ⁠investments. Tech ​stocks such as Siltronic lost 2% and ASMI lost 1.3%, while AI equipment makers such as Schneider Electric and Siemens Energy were marginally ⁠lower.

On the earnings front, Teleperformance tanked 18% after cutting its full-year revenue growth ⁠outlook after weakness ⁠in the outsourcing firm's trust and safety business more than offset growth in its AI-powered and back-office services.