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European tech and luxury stocks took a hit on Wednesday following weak earnings reports from key players like ASML and LVMH, adding to market jitters ahead of the European Central Bank’s (ECB) upcoming policy decision. The STOXX 600 index fell by 0.3%, pulling back further from a recent two-week high.
Tech Sector Declines Led by ASML
ASML, the world’s largest chipmaking equipment manufacturer, saw its stock plummet 5%, dragging the broader tech index down by 1.3%, marking a one-month low. This extended ASML’s steepest one-day drop in four years, triggered by a weak sales forecast for 2025. The gloomy outlook also spurred a global sell-off in semiconductor stocks, further weighing on the sector.
Luxury Sector Struggles as LVMH Sales Disappoint
The luxury sector didn’t fare any better, as French luxury giant LVMH posted a 4.5% drop following a disappointing third-quarter sales report. This added pressure to the French CAC 40 index, which underperformed other major European markets. Concerns over weaker Chinese consumer spending have loomed over the sector, with other luxury brands like Gucci-owner Kering, Hermes, and Cartier-owner Richemont all seeing their stocks decline by around 2%. Both the luxury and personal goods sectors continue to underperform the STOXX 600 this year, as China-exposed firms struggle with softer demand in the world’s second-largest economy.
Adidas Also Struggles Despite Positive Forecast
Even Adidas, which raised its full-year sales and profit guidance, saw its shares fall by 4%, reflecting the broader market unease in Europe.
FTSE Rises as Inflation Data Fuels Rate Cut Hopes
On the brighter side, London’s FTSE bucked the trend, rising 0.6% after data revealed a larger-than-expected drop in British inflation for September, boosting hopes for a rate cut from the Bank of England next month.
ECB Decision in Focus
Investors are now focusing on the ECB’s policy meeting, with expectations of a 25-basis-point rate cut on Thursday, which could provide a lift to European stocks. The energy sector also provided some relief, with a 0.9% rise following a stabilization in oil prices after recent declines.
Other Market Movements
Elsewhere, Stellantis fell 2% after the automaker warned of a 20% drop in third-quarter consolidated shipments. Just Eat Takeaway also slid by more than 2% after missing expectations for third-quarter gross transaction value, while Swiss life sciences company Tecan dropped 12% after cutting its annual outlook. In contrast, Teleperformance rose 6% following an upgrade to “buy” from Kepler Cheuvreux.
