Key facts
- European shares were subdued as technology stock weakness was offset by gains in luxury and consumer stocks.
- The pan-European STOXX 600 index held its ground.
- Technology stocks fell 0.8%, extending previous session losses.
- A report on China's domestic chip-making technology manufacturing impacted investor sentiment.
- Unilever and LVMH shares rose after beating sales growth estimates.
- Mercedes-Benz reported a rise in second-quarter profit but warned of weakness in its core cars business.
European shares were subdued on Tuesday as a global selloff in technology stocks was balanced by earnings-driven gains in luxury and consumer stocks, with lower oil prices lending additional support. The pan-European STOXX 600 index held its ground at 645.32. Technology stocks led declines, down 0.8%, extending losses after the sector dropped nearly 2% in the previous session. Investor sentiment was hit by a report that China has started manufacturing domestically developed immersion deep-ultraviolet lithography machines, a key chip-making technology long dominated by Dutch equipment maker ASML. The report triggered a selloff in semiconductor stocks, with U.S. chipmakers closing lower overnight and Asian peers also retreating on Tuesday. Shares of ASML were down 2% in early European trading. Bucking the broader subdued mood, the personal and household goods sector gained 1.8%. Unilever jumped 5.3% after the consumer goods group beat second-quarter sales growth estimates, helped by higher volumes and prices. Shares of LVMH climbed 2.5% after the luxury group reported a 3% rise in its second-quarter sales, supported by resilient demand from U.S. shoppers. Mercedes-Benz gained 3.3% after the German premium carmaker reported a 22% rise in second-quarter operating profit, but warned of weakness in its core cars business. Investors are also looking ahead to earnings from major U.S. technology companies this week for clues on the sustainability of the AI-driven market rally. The U.S. Federal Reserve will announce its monetary policy decision on Wednesday.