European shares slipped on Friday from record highs after Jensen Huang resigned as Nvidia's CEO and clouded the outlook for the AI trade. The STOXX 600 fell 0.2% but remains up over 2% for the week. Earnings drove moves in individual stocks.
European shares slipped on Friday, retreating from record highs hit in the previous session, as uncertainty over the AI trade rippled through global markets after Jensen Huang's abrupt resignation as Nvidia's CEO.
Investors worried about what Huang's resignation, which followed revelations of extramarital affairs, would mean for future AI development. He was a key personality in a web of deals that financed the trade.
Tech sector down 0.9%
The STOXX 600 was down 0.2% at 662.51 points at 0858 GMT, with the tech sector down 0.9%. Chip stocks Infineon and Aixtron fell about 2% each, while AI equipment makers Schneider Electric and Legrand were marginally lower.
Fiona Cincotta, an independent market analyst in London, said tech has come under pressure from the Nvidia fallout, on top of concerns that were already lingering over the AI trade. However, analysts say Europe's smaller exposure to AI-linked stocks makes it relatively less vulnerable to AI volatility.
Weekly gain stays intact
Earlier this week, the STOXX 600 breached record-high levels for the first time since August. It is up over 2% for the week, its strongest gain since June. Its US peer, the S&P 500, is more than 3% away from all-time highs.
Meanwhile, Goldman Sachs raised its 12-month target for the STOXX 600 to 700 points from 695. Robust earnings this quarter have also supported European equities.
Earnings split winners from losers
Wise Group gained 4.7% to top the benchmark index after the money transfer company reported a 23% net revenue rise in the first half of its fiscal year. In contrast, Richemont fell 6.5% after the Cartier owner reported weaker-than-expected sales in its jewellery unit in Q2.
The broader luxury sector slid 2%, with Kering down 1.3% and LVMH off 0.2%. Italian insurer Generali lost 1.5% after its operating profit rose 8.5% to €6.45 billion ($7.13 billion) in the first nine months of the year but missed consensus by 1%.
A slight tick up in Brent crude prices also fuelled caution as tanker attacks in the Strait of Hormuz continued, dampening the chances for an imminent end to the US-Iran conflict. Later in the day, euro zone Q3 GDP data is due at 1000 GMT.
Source: Investing.com
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