stock markets close mostly down, under pressure from technology stocks and with an eye on tension in Hormuz

European stock markets closed mostly lower this Tuesday, 7th, pressured by the sharp drop in the technology sector, after Samsung’s earnings triggered a global wave of sales in shares linked to artificial intelligence (AI). Investors also monitored the escalation of tensions in the Strait of Hormuz, new indicators of the German economy and statements from European authorities.

In London, the FTSE 100 closed down 0.13%, at 10,665.88 points. In Frankfurt, the DAX fell 1.27%, to 25,489.26 points. In Paris, the CAC 40 lost 0.51%, to 8,436.24 points. In Milan, the FTSE MIB fell 0.95%, to 52,455.44 points. In Madrid, the Ibex 35 fell 0.02%, to 19,679.50 points. In Lisbon, the PSI 20 gained 0.35%, at 9,249.11 points. Quotes are preliminary.

In the United Kingdom, the Bank of England (BoE) warned of increased risks to financial stability due to greater leverage in AI-linked stocks. It was precisely the tech sector, which fell 3.5% in the wake of Asian pressure. ASML (-7.4%), Infineon (-8.1%), STMicroelectronics (-7.7%), Siltronic (-11.5%) and BE Semiconductor (-6.7%) retreated.

In Paris, the luxury sector (+1%) offset the technology mood, with names like LVMH up 1%. Investors also considered the decision of the French court that authorized Marine Le Pen to contest the 2027 presidential election, as long as she serves her sentence with an ankle bracelet.

Shell rose 3.2% after forecasting stronger results in its gas division, while BP (+1.7%) and TotalEnergies (+1.3%) were also helped by the rise in oil following reports of three new attacks on ships in Hormuz. Despite new tensions, the European defense sector fell 2.3%, as the market monitors the start of the North Atlantic Treaty Organization (NATO) summit in Ankara, Turkey.

Furthermore, Germany’s industrial production increased 0.9% in May compared to April, above expectations. ING assessed that the result “challenges fears of recession”, although it considered that the industry’s recovery remains gradual. The head of the European Central Bank (ECB), Fabio Panetta, stated that the prospects for the euro zone remain fragile and defended caution in the conduct of monetary policy.

*With information from Dow Jones Newswires