European Stocks Swing Lower

European stock indices closed lower after having spent most of the session higher, tracking the afternoon slump for US stocks as the aggressive rotation out of tech stocks rippled through demand for risk globally. The Euro STOXX 50 fell 0.2% to 6,050 and the STOXX Europe 600 dropped 0.4% to 619. Companies with exposure to software services and datacenter infrastructure dropped sharply as skepticism over the sector's rally sustainability was reignited. Infineon, SAP, Schneider, and Siemens Energy slumped between 2% and 5.5%. banks also closed lower ahead of the expected rate hike by the European Central Bank this week, denting the outlook for fragile credit activity. Santander, ING, and Nordea dropped around 1%. In London, GSK eased 0.5% mid reports that the company is in talks to acquire oncology biotech Nuvalent.

European stocks edged cautiously higher on Tuesday, with the STOXX 50 gaining 0.4% and the STOXX 600 advancing 0.2%. Markets were supported by a rebound in semiconductor stocks that started in the US and extended into Asia overnight. Investor sentiment also improved as oil prices declined following pledges from Iran and Israel to scale back hostilities and ease military strikes. Meanwhile, traders are bracing for the ECB’s monetary policy decision on Thursday, where the central bank is widely expected to raise interest rates by 25 bps. ASML Holding rose 1%, Infineon Technologies gained 2.3%, and STMicroelectronics advanced 1%, while UBS climbed 1.6% amid reports that Swiss lawmakers are considering a proposal to ease capital requirements for the lender. In contrast, AstraZeneca fell 1.5%, SAP declined 1.5%, Siemens Energy slipped 0.6%, and BP dropped 1.1%. GSK tumbled 2.8% amid reports that the company is in talks to acquire oncology biotech Nuvalent.

European equity markets were poised to open little changed on Tuesday, snapping a recent slide as traders assessed a fragile ceasefire between Iran and Israel after the two countries agreed to halt attacks against each other. Investors also looked ahead to the European Central Bank’s upcoming policy decision, where policymakers are widely expected to raise interest rates amid mounting inflationary pressures from elevated energy costs. Meanwhile, market participants will monitor Germany’s April trade and industrial production data for fresh signals on the region’s economic outlook. In corporate news, British pharmaceutical company GSK is reportedly in talks to acquire oncology biotech Nuvalent for more than $9 billion, according to the Financial Times. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were flat to slightly lower.