Tech selloff drags Europe stocks lower as SAP’s results disappoint

EUROPE’S benchmark share index gave up early gains to close lower on Thursday, weighed by a selloff in technology stocks as results from Germany’s SAP and US-based Microsoft failed to impress investors.

The pan-European Stoxx 600 eased 0.23 per cent to 607.14 points, with the technology sector falling 2.8 per cent in its biggest daily drop since April 2025, when US tariff hikes sparked a rout in global markets.

Germany’s DAX underperformed other regional indexes, closing 2 per cent lower as SAP slid 16 per cent after its annual cloud revenue forecasts failed to meet market expectations. The German enterprise software maker’s shares logged their steepest drop since 2020.

Investors have been scrutinising tech results for clues on how companies are monetising artificial intelligence, having spent billions on developing the technology in recent years.

“A lot of it is about the guidance for the future and concerns about whether we can see the same pace of growth going forward,” said Marija Veitmane, head of equity research at State Street.

On Wall Street, investors sold shares of Microsoft and ServiceNow after their respective results also fell short of expectations.

Still, Veitmane said investors should not diversify out of the US and out of technology stocks because that’s one area where profitability is unmatched.

Earnings in the US tech sector are expected to have increased 28.2 per cent year-on-year in the previous quarter, compared to an 8.3 per cent decline for their European peers, according to data compiled by LSEG.

Geopolitics also kept markets on edge, with the euro Stoxx volatility index spiking 2.3 points.

SEE ALSO

US stocks: S&P 500, Nasdaq close down as Big Tech’s soaring AI budgets trigger flight

The US threatened to attack Iran again and concerns about disrupted supplies from the oil-rich region lifted crude prices 3 per cent to six-month highs. 

European energy stocks climbed 1.4 per cent, helping offset some of the declines in other sectors. Deutsche Bank fell 1.2 pre cent despite posting its largest annual profit since 2007 as investors weighed the implications of an ongoing probe into alleged money laundering.

Finland’s Nokia slumped 9.4 per cent after the telecom gear maker issued what analysts considered cautious guidance and said that longtime chair Sari Baldauf planned to step down.

Swiss engineering group ABB surged 8.5 per cent after posting a record quarterly order intake and giving a confident outlook for 2026, while Remy Cointreau added nearly 1 per cent after the beverage maker’s third-quarter sales returned to growth and beat market forecasts. REUTERS