European shares set ​to open lower

Futures tracking the pan-European STOXX 600 index dropped 1.1 per cent

European shares were set ​to open lower on Tuesday as concerns around increased corporate spending on artificial intelligence dented sentiment.

Futures tracking the pan-European STOXX 600 index dropped 1.1 per cent as of 0637 ​GMT. Contracts tracking Germany’s DAX and France’s CAC 40 index declined ​1 per cent and 0.8 per cent, respectively.

Traders now see the U.S. central bank hiking ⁠interest rates by a total of 50 basis points by the end ​of this year, according to the CME Group’s FedWatch Tool, to combat inflation ​pressures stemming especially from higher energy costs.

Markets also held on to bets that the European Central Bank will lift borrowing costs by another 25 bps later this year, ​according to LSEG-compiled data, despite President Christine Lagarde downplaying the likelihood of second-round ​inflation effects on Monday.

European tech stocks are likely to come under pressure, tracking weakness in ‌Asia on Monday.

Internationally, the tech sector had a strong run earlier this quarter as investors bet on the AI boom, with those in Europe performing the strongest among sectors. However, as borrowing ​costs tick higher, ​corporates banking on ⁠debt-backed spending are likely to come under pressure.

In corporate news, EasyJet and its investors are holding out for at least £600 ​million more from U.S. investment firm Castlelake, the ​Financial Times ⁠reported on Monday.

Plans by UniCredit to take Commerzbank private would be very difficult to implement under the German lender’s current structure, government sources told Reuters on Monday.

Dutch ⁠brewer ​Heineken appointed Rafael Oliveira as its new CEO, ​replacing Dolf van den Brink, who resigned from the company amid an industry-wide slump in sales.