European technology stocks fall sharply amid global selloff

The STOXX Europe 600 index had declined 0.35% to 635.54 points, while the European technology sector index fell 3.2%. The losses followed stronger-than-expected US inflation data released on October 14, which reinforced concerns about further Federal Reserve tightening. Investors focused particularly on technology companies requiring substantial borrowing to finance artificial intelligence infrastructure. However, Ericsson shares gained 9.9% following its quarterly results, while Pernod Ricard advanced 3.2% after reporting better-than-expected sales performance.

The decline highlights growing concerns about the financing costs and valuations of AI-related businesses. Higher borrowing rates could weigh on companies investing heavily in data centres, semiconductors and other capital-intensive technologies by reducing the present value of future cash flows. Nevertheless, gains in selected companies demonstrate that selling pressure has not affected all sectors equally. European equity performance may remain sensitive to US Treasury yields and expectations surrounding corporate financing conditions.