By Purvi Agarwal and Tharuniyaa Lakshmi
July 29 (Reuters) – European shares slipped in choppy trading on Wednesday, even after robust results from Kering, as a nervous market shunned technology stocks ahead of a slew of upcoming U.S. Big Tech earnings reports, while monitoring the Middle East crisis.
The pan-European STOXX 600 was down 0.3% at 644.89 at 0839 GMT, giving up early gains.
Technology stocks were the biggest drag on the index, led by an 8% drop in semiconductor equipment maker ASM International despite an upbeat forecast, setting the company up for its biggest one-day fall in a year.
Sentiment took a hit after South Korean chipmaker SK Hynix reported bumper quarterly results but fell short of lofty investor expectations, heightening market concerns about slower AI spending by big tech firms.
Microsoft and Meta will report after U.S. markets close, with investors laser-focussed on evidence of returns on their AI investments.
OIL GAINS, FED IN FOCUS
Energy stocks rose 1.1%, following a 3% jump in Brent crude to over $86 a barrel, as U.S. and Saudi Arabian strikes in Iraq threatened to escalate the ongoing U.S.-Iran conflict. [O/R]
“The reporting season is driving markets, but has been overshadowed by developments in the Middle East. Then there is general market weakness as investors remain quite nervous about capex in data centres, particularly related to AI,” said Andrea Cicione, head of research at TS Lombard.
On the flip side, Kering jumped 11%, on track for its biggest one-day gain in over a year, after second-quarter sales at its flagship brand, Gucci, fell less than expected.
The report lent support to LVMH, which reported a 3% rise in its sales on Tuesday – a sign that demand for luxury goods remains resilient amid the U.S.-Iran conflict.
Meanwhile, U.S. Federal Reserve is not expected to make any changes to monetary policy on Wednesday, but its chief, Kevin Warsh’s, policy statement will be parsed for any hints on the central bank’s next likely move.
Among other movers, French IT group Sopra Steria soared 14% after raising its full-year revenue growth target, making it the biggest percentage gainer on the STOXX 600.
Glencore rose 3% after its first-half copper production rose 15% on higher grades at key operations.
UBS added 3% after the Swiss bank booked a 17% jump in second-quarter profit and announced plans to buy back shares worth $3 billion by the middle of next year.
Deutsche Bank gained 5% after reporting a 10% jump in second-quarter profit, defying expectations for a drop.
Aberdeen lost 6% after posting £3 billion ($4 billion) in outflows in the first half of the year, compared with expectations of £800 million in inflows.
(Reporting by Purvi Agarwal and Tharuniyaa Lakshmi in Bengaluru; Editing by Nivedita Bhattacharjee, Amanda Cooper and Harikrishnan Nair)
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