European shares flat as consumer stocks offset tech selloff
The pan-European STOXX 600 index was up 0.1% at 650.99 points
European shares were flat on Tuesday as gains in consumer-related stocks offset a selloff in AI-linked technology stocks.
The pan-European STOXX 600 index was up 0.1% at 650.99 points by 0854 GMT, after closing below record high levels in the previous session.
Investors focused on sectors that have been beaten down this year on concerns that inflation pressures from the Mideast war dampened consumer sentiment. Luxury stocks added 2%, consumer staples stocks such as personal & household goods and food & beverage rose more than 1.4% each, while auto stocks advanced 1.3%.
It’s part of a rotation to cheaper, less-loved, less tech-heavy sectors of the market. We’re seeing much more of a broadening out rather than leadership from a narrow group of stock, said Kathleen Brooks, research director at brokerage XTB.
I’m really looking at consumer staples especially because of the decline in the oil price and the fact that, that’s going to reduce the impetus for central banks to raise interest rates, Brooks said.
Tech stocks shed 2.3% on concerns that a quarter-long rally in chip stocks had overvalued the sector. The second-quarter rally in Europe was also led by tech majors in the region.
French chip materials supplier Soitec tumbled 12%. Circuit board manufacturer AT&S declined 9.5% and Franco-Italian chipmaker STMicroelectronics shed 5%.
Siemens Energy tumbled 7% after brokerage Barclays downgraded the AI equipment maker to “underweight” from “equal-weight”.
Reflecting the gloom, South Korea’s Samsung Electronics shares slipped despite strong forecasts and Nasdaq futures on Wall Street slid almost 1%.
Defence stocks dropped following a surge earlier this month that put them among the top STOXX 600 gainers.