AI Fears Shake European Tech Markets as Dassault Shares Plummet

European shares experienced a decline led by technology stocks after disappointing results from Dassault Systèmes fueled investor concerns over AI's impact on traditional businesses. The STOXX 600 index fell, driven by sectoral losses, while insurance stocks also suffered following a sector downgrade by Barclays.

European markets faced a downturn on Wednesday, driven by technology stocks, after Dassault Systèmes' performance fell short of investor expectations. Concerns over the effects of burgeoning artificial intelligence technologies on conventional businesses contributed to the uncertainty.

The pan-European STOXX 600 index dropped 0.2% to 619.66 points, with France's CAC 40 index leading the slope among regional indicators, sliding 0.3%. Dassault shares plummeted nearly 20% post a temporary trading halt, with its fourth-quarter revenue only seeing a 1% increase in constant currency, hovering on the lower guidance end. The technology sector broadly suffered a 2% decline.

Additionally, insurance stocks were hit hard, following Barclays' downgrade of the European insurance sector to 'Underweight' post the roll-out of the Insurify ChatGPT tool. Despite this, some shares saw gains, like AI equipment manufacturers and the London Stock Exchange Group, which rose due to strategic investments and cost-cutting measures.

(With inputs from agencies.)