European shares slip as tech sell-off bites, Zalando slides

[FRANKFURT] European shares pulled back from record highs on Friday (Jun 26), with technology shares tracking global sector weakness, while Zalando fell after Germany’s financial regulator launched a probe into the retailer’s accounts.

The pan-European STOXX 600 index closed 0.7 per cent lower, narrowly marking gains for the week.

Shares of Zalando slid 6.3 per cent after BaFin launched an investigation into the online fashion retailer’s 2025 financial statements, citing evidence the company breached accounting regulations. The broader retail sector lost 1.6 per cent.

Meanwhile, uncertainty around the global technology sector prevailed, with investors focused on a surge in memory chip costs as a result of strong AI-driven demand. Asian equities fell sharply overnight, while Wall Street’s tech-heavy Nasdaq flip-flopped between gains and declines.

“The AI narrative in markets right now is all over the place, shifting from questions about ROI from the AI spend, to exuberance about the AI spend,” said Richard Reyle, chief investment officer at Questar Capital Partners.

“These conflicting narratives suggest that the market is in the process of picking winners and losers in this space, and that is a process that will take time.”

In Europe, the tech sector fell 1.2 per cent.

Chipmakers Infineon and STMicroelectronics slipped 4.5 per cent each. On the other hand, semiconductor equipment makers BE Semiconductor and ASML dropped 2.2 per cent and 1 per cent, respectively.

AI equipment maker Schneider Electric shed 1.3 per cent. Telecom companies Ericsson and Nokia were also down 1.7 per cent and 6.5 per cent, respectively.

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European shares slip on global tech slump; Zalando down on regulator action

The benchmark STOXX 600 marked modest weekly gains, as easing oil supply concerns following the partial reopening of the Strait of Hormuz helped Brent crude retreat to pre-conflict levels, while Europe’s smaller tech exposure helped cushion the losses seen in regional equities.

The STOXX tech index now outperforms the S&P 500 tech sector on an annual, monthly and quarterly basis, also due to the Wall Street index’s bigger exposure to software companies.

US inflation broke above 4 per cent for the first time in three years in May, reinforcing expectations for a rate hike from the Federal Reserve this year.

Traders are pricing in another 25 basis point interest rate hike by the European Central Bank by year-end, according to LSEG-compiled data.

Among others, automaker Volkswagen shares were up 3.9 per cent. A report said the company aims to slash up to 100,000 jobs over the next few years.

London-listed shares of Wise climbed 9.6 per cent after the money transfer company reported strong growth in customers and announced a share buyback plan worth US$500 million. REUTERS