(Bloomberg) -- European stocks fell on Tuesday, dragged down by weaker-than-expected bookings from ASML and a slide in energy shares.
The Stoxx Europe 600 Index was down 0.8% by the close in London, though still within striking distance of its September 27 record high of 528.08 points. ASML tumbled 16%, pulling technology stocks lower, after releasing earnings early. The tech subsector fell 6.5%, its biggest drop in about four years.
Energy stocks fell sharply, tracking a slide in oil prices, after a report suggested that Israel will hold off attacking Iran’s energy facilities. The sector’s index slipped as much as 3.5%.
Among other stock movers, Swedish telecom equipment maker Ericsson AB rose 11% after its earnings beat analysts’ estimates. Meanwhile, the reporting season for Europe’s luxury goods sector started on a dismal note, as sales in the biggest unit of LVMH fell for the first time since 2020, versus expectations of a small gain. The company reported results after markets closed.
Investors expect near-term upside for European equities, according to Bank of America Corp.’s European fund manager survey, with 27% of respondents seeing gains for the region’s cyclicals relative to defensives, the highest since June.
“It seems a bit complacent to us with the geopolitical risk,” said Yann Azuelos, senior portfolio manager at Mirabaud in Paris.
While data so far point to a gentle cooling in the euro-area economy, rather than a rapid downturn, concerns are mounting about French finances and Germany’s lackluster economy. According to a Bloomberg survey, Germany is suffering from a mild recession and output across the whole of 2024 will be flat — underscoring the malaise in Europe’s largest economy.
The downturn is likely to see the European Central Bank cutting interest rates later this week, according to economists surveyed by Bloomberg.
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- US Stock Futures Rise; Hims & Hers Health Gains
- The Pay Growth Risk: The London Rush
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--With assistance from Michael Msika.
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