(Bloomberg) — European stocks pared losses, ending the day little changed, as traders scooped up more defensive-oriented shares, like chemical makes and food companies, to offset losses in technology.
The Stoxx Europe 600 Index was down 0.1% at the close in London. British American Tobacco Plc rose after an upgrade by UBS analysts. Chemicals firms rose after JPMorgan strategists said it is time to turn more bullish because destocking in the industry is largely over.
Meanwhile, technology shares suffered after the release of a cheaper AI model from Chinese startup DeepSeek. The buzz around DeepSeek, which runs on less advanced chips than rivals, also hit AI-exposed power providers like Siemens Energy AG.
“Excitement over DeepSeek has caused the first question mark over US AI dominance,” said Daniel Murray, Zurich-based chief executive officer of EFG Asset Management in Switzerland. “Whilst this has some implications for Europe equities, it is less significant given the much smaller weight in AI-themed stocks in European markets.”
Among other single stocks, SGS SA rose and Bureau Veritas SA fell after the pair ended talks of a potential merger. Ryanair Holdings Plc rose after the budget airline reported earnings that beat estimates.
Traders are keeping a close eye on the region’s earnings season and the ECB’s interest rate path for clues about further economic growth drivers. Later this week, the ECB is seen lowering interest rates for a fourth straight meeting amid the euro-area economy’s sub-par performance while the US central bank is widely expected to hold interest rates steady.
Investors are also trying to keep track of President Trump’s tariff threats. News in Columbia, where Trump announced sweeping tariffs before abruptly pulling the threat, “highlights the volatility that markets will need to come to terms with,” said Mohit Kumar, chief economist for Europe at Jefferies International.
For more on equity markets:
- Buoyant Banks Defy the Outlook for Rate Cuts: Taking Stock
- M&A Watch Asia: Sany Heavy, BOC, Bank of Hangzhou, Greatview
- DeepSeek Shakes Up Stocks as Traders Fear for US Tech Leadership
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