Tech selloff, defence weakness weigh on European shares

 Losses in technology shares dragged the European benchmark stock index lower on Thursday as investors assessed ‌the outlook for the sector following a Democratic sweep in the US midterm elections, while weakness in the defence sector exacerbated the decline.

The pan-European STOXX 600 index  closed 0.38% lower at 654.87 points, having pulled back from close to an all-time high earlier in ​the session. Regional bourses were mixed however, with French and Spanish benchmark indexes ending higher.

Technology stocks  fell 3.2% ​to their lowest level in nearly two months, tracking losses on Wall Street where the ⁠tech-heavy Nasdaq  is poised to confirm a correction.

Chip-linked stocks were among the biggest decliners on the STOXX 600, with ​Soitec  slumping 16.7% while Infineon  fell 8.5% and Aixtron  declined 9.8%. AI heavyweight ASML  retreated 6.6%, and Siltronic  slid 12.3%.

"It's ​really a story of a rotation happening from technology to non-technology and from the US to non-US markets as a result of the midterm elections and the very aggressive Democratic sweep," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.