European Shares Decline as Tech Sell-Off, Mideast Tensions Spook Investors

European stocks declined on Friday morning, putting the regional benchmark on course for a weekly loss as a global sell-off in technology shares and rising geopolitical tensions in the Middle East dampened investor sentiment.

The pan-European STOXX 600 index was down 0.6% to 639.94 points by 0707 GMT, according to a Reuters report. The broad-based decline signals a cautious end to a week marked by sector rotation and growing risk aversion.

Tech Sector Leads Declines

The technology sector was the hardest hit, dropping 2.3% and leading sectoral losses. The sell-off in Europe mirrored weakness in Asian and Wall Street tech stocks, driven by concerns over elevated valuations after a strong rally earlier this year.

Key semiconductor stocks were under significant pressure despite recent strong forecasts from industry leaders:

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• ASML Holding and ASMI both dropped by more than 4%.
• French chipmaker Soitec saw its shares fall 3.6%.

Geopolitical Jitters and Market Movers

Broader market caution was fueled by reports that Iran had launched new attacks on U.S. facilities in the Gulf, a development that contributed to a rise in oil prices. This geopolitical uncertainty is prompting investors to reassess risk exposure.

Among individual stocks, Britain's Burberry slipped 1.7%. While the luxury group reported a continued sales recovery aided by the U.S. and China, it noted that the Middle East conflict was weighing on tourist spending in Europe. In contrast, shares of Swedish defense group Saab rose 3.4% after it reported a larger-than-expected increase in second-quarter operating profit, citing strong demand and order intake.