European Stocks Set for Negative Open

European stocks were mixed on Tuesday, with the STOXX 50 hovering around the flatline and the STOXX 600 rising 0.3%, as a renewed global tech sell-off, fuelled by concerns over the sustainability of the AI trade, spilled over into European markets. Meanwhile, falling oil prices and bond yields provided some support to equity markets. ASML Holding tumbled 3.4%, while Infineon Technologies plunged 4.8% and STMicroelectronics fell 4.6%. Investors also assessed the latest corporate earnings, with LVMH falling 1.3% after reporting weaker-than-expected Q3 organic sales, weighed down by cooling Chinese demand. Its fashion and leather goods division, a key revenue driver, recorded a 5% decline. Elsewhere, Hermes fell 1%, while Richemont slipped 0.5%. Siemens Energy lost 2.2%. In contrast, the banking sector was a bright spot, with HSBC (1.5%) and Santander (0.7%) trading higher. Novartis (1.6%), AstraZeneca (2.1%) and Unilever (1.3%) also booked strong gains.

European equity markets were poised to open lower on Tuesday as a global selloff in technology stocks dampened investor sentiment. The decline reflected growing concerns over the AI trade, with investors reassessing capital spending outlooks amid rising borrowing costs. Meanwhile, falling oil prices and bond yields offered some relief to equity markets. In Europe, investors will focus on German inflation and current account data. On the corporate front, sales at LVMH’s largest division declined sharply as deteriorating economic conditions and consumer backlash in China weighed on its flagship Louis Vuitton brand. Italian lender Banca Monte dei Paschi di Siena also reaffirmed its ambition to build a larger banking group, while viewing Intesa Sanpaolo SpA’s revised takeover offer as financially inadequate. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures fell 0.2% and 0.1%, respectively.

European stocks closed higher for a second session on Monday, tracking the positive momentum for most sectors in US equity markets on upbeat earnings projections. The Euro STOXX 50 added 0.4% to 6,169 and the STOXX Europe 600 gained 0.6% to 635. Sell-side firms signaled that global earnings growth is expected to remain robust ahead of the incoming results-sharing season, supporting most sectors despite the elevated yields backdrop. LVMH added 1.2% before releasing its third-quarter revenues, while Hermes rose over 2% to consolidate a strong session for luxury brands. Meanwhile, banks enjoyed some respite with Santander, BBVA, and ING adding close to 2%. On the other hand, ASML fell 1.5% amid a broad pullback for companies in AI infrastructure. The Eurozone's largest economy is due to report results this week.