European Stocks Pressured by SAP

European equity indices closed lower on Friday amid the prolonged impasse between the US and Iran and the outlook of higher rates by major central banks. The Euro STOXX 50 fell 0.4% to 6,080 and the STOXX Europe 600 pared gains to close below the flatline at 623. The ECB is due to raise its interest rates next week after updated data reflected relatively steady growth in the main Eurozone economies, save for Ireland, which had a swing in flows for multinational companies pressure the bloc's GDP. In turn, expectations of a Fed hike this year gained ground after amid strong US jobs report and little hopes of a significant recovery in energy prices. AI infrastructure stocks sank further after the muted outlook for Broadcom triggered a pivot out of the sector. Infineon, Adyen, and Nokia fell over 7%. In turn, UniCredit, BBVA, and ING dropped around 1% each. Both the Euro STOXX 50 and STOXX Europe 600 were due to close the week with muted changes.

European equities traded lower on Friday, with the STOXX 50 declining 0.6% and the STOXX 600 losing 0.3%, as concerns stemming from Broadcom's outlook continued to weigh on semiconductor stocks and broader market sentiment. Among the biggest decliners were Infineon Technologies (-4.9%), ASML Holding (-3.2%), STMicroelectronics (-3.2%) and Schneider Electric (-1.9%). Industrial and banking stocks also came under pressure. At the same time, investors continued to monitor developments in the Middle East, where uncertainty over a resolution to the conflict persists amid a fragile ceasefire and repeated setbacks in negotiations. For the week so far, the STOXX 600 is down 0.2%, while the STOXX 50 has gained 0.8%.

European equity markets were set to open slightly higher on Friday as investors reassessed the outlook for the artificial intelligence trade while monitoring ongoing uncertainty in the Middle East. Regional markets have generally held up better than their US and Asian counterparts, largely due to Europe’s lower exposure to technology stocks. Investors will also focus on a fresh batch of economic data, including first-quarter GDP and employment figures from the Eurozone, UK house price data, French trade statistics, and Italian retail sales. Corporate earnings are expected to remain relatively quiet, with no major earnings release scheduled in Europe on Friday. In premarket trading, futures linked to the EURO STOXX 50 and STOXX Europe 600 were both up about 0.1%.