European Stocks Lower on Friday, Tech and Chipmakers Weigh

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%.

European stocks closed firmly higher on Thursday as a pullback in oil prices limited the magnitude of pro-inflationary risks faced by the European corporate sector. The Euro STOXX 50 added 0.8% to 6,103 and the STOXX Europe 600 gained 0.5% to 624. Israel and Lebanon signed a ceasefire agreement, part of the precedent for the Iran and the US to lift their blockade on commercial vessels that has triggered shortage risks on energy commodities. Banks closed firmly higher with Santander, Deutsche Bank and UniCredit adding between 1.5% and 3%. Aerospace stocks were also higher, with Airbus gaining 4.6%. Outside the Eurozone, HSBC lost nearly 2% after reports indicated that authorities have prohibited some Mainland China clients from opening Hong-Kong based accounts.