European shares fall as global tech rout hits risk appetite

European shares experienced a decline on Thursday, as global tech stocks faced a rout driven by concerns about rising borrowing costs. The pan-European STOXX 600 index slipped by 0.35% to 635.54 points by 0709 GMT. The tech sector was notably affected, with stocks from New York to Seoul suffering significant losses following heightened US inflation data on Wednesday that raised fears of additional Federal Reserve rate increases.

Several companies heavily reliant on debt to fund artificial intelligence infrastructure have been under pressure, with Deutsche Bank highlighting the vulnerability of firms with substantial capital expenditures. While the technology sector plummeted by 3.2%, indicating its susceptibility to fluctuations in AI sentiment, earnings reports provided a glimmer of optimism.

Ericsson experienced a 9.9% increase after reporting a smaller-than-expected decline in third-quarter core profit, thanks to efficiency gains that offset higher component costs. Similarly, Pernod Ricard rose by 3.2% after disclosing a minor 0.9% decrease in first-quarter sales for its 2027 fiscal year.