Chipmakers buoy European shares after two-day selloff

European stocks steadied on Thursday after their worst two-day selloff since March as investors balanced concerns over the U.S. debt ceiling standoff and global economic slowdown with optimism from upbeat corporate earnings. The pan-European STOXX 600 index was flat by 0707 GMT after shedding about 2.5% in the past two days, triggered by a selloff in luxury stocks and little progress in talks to raise the U.S. debt ceiling and avert a default.

European stocks steadied on Thursday after their worst two-day selloff since March as investors balanced concerns over the U.S. debt ceiling standoff and global economic slowdown with optimism from upbeat corporate earnings.

The pan-European STOXX 600 index was flat by 0707 GMT after shedding about 2.5% in the past two days, triggered by a selloff in luxury stocks and little progress in talks to raise the U.S. debt ceiling and avert a default. Ratings agency Fitch put the United States' credit on watch for a possible downgrade on Wednesday.

European chipmakers gained on Thursday after the world's most valuable chipmaker Nvidia Corp forecast quarterly revenue more than 50% above Wall Street estimates. Shares of BE Semiconductor jumped 6.5% and ASM International rose 6.3%. The wider tech index rallied 1.7%.

Germany's DAX slipped after data showed the German economy contracted in the first quarter of 2023, compared with the previous three months, thereby signalling a recession.