Europe midday: Stocks fall as Jackson Hole nerves offset Nvidia optimism

(Sharecast News) - Stock markets across Europe were mostly lower on Thursday despite Nvidia's blockbuster results giving the tech sector a boost, with investors turning nervous ahead of a key meeting of global central bankers at Jackson Hole.

"Euphoria around Nvidia's latest results failed to spread across the rest of the market as European equities were in the red on Thursday," said Dan Coatsworth, head of markets at AJ Bell.

Indices in London, Milan and Madrid were down around 0.5%, while Paris's CAC 40 dropped 1.2%. While the Dax in Frankfurt edged 0.2% higher, the pan-European equity benchmark Stoxx 600 was trading 0.4% lower.

Shares in Nvidia were set to surge on Wall Street after the chip designer and computing infrastructure giant reported late on Wednesday a doubling of revenues in the second quarter and sales guidance well ahead of market forecasts.

Despite increasing market concerns about a slowdown in the AI boom, chief executive and founder Jensen Huang said demand was still picking up and the AI infrastructure buildout was at "full steam".

Nvidia futures were up 6.5% before the opening bell, lifting European tech stocks including Computacenter, Polar Capital Technology Trust and STMicroelectronics.

"The jump in the share price in pre-market trading suggests that investors have once again been wooed by Nvidia CEO Jensen Huang's unwavering optimism. Yet the more success Nvidia enjoys, the bigger the potential fall as soon as the good news machine splutters," Bell said.

However, the three-day Jackson Hole Economic Policy Symposium of central bankers and finance ministers in Wyoming, which begins on Thursday, was weighing on risk appetite outside of the chip and AI sectors. The meeting comes after the Fed's preferred measure of inflation, the PCE price index, came in above forecasts for July.

"Few traders are likely to push every engine to maximum thrust before Warsh delivers his first Jackson Hole address as Fed chair. If he signals that persistent inflation requires another turn of the screw, the AI earnings runway may remain long, but the financing cost attached to it will be steeper," said market commentator Stephen Innes.

In other news, oil prices rebounded slightly after three days of losses as investors continued to digest diplomatic efforts to broker a deal between Iran and Oman to reopen the Strait of Hormuz. After falling initially, Brent was up 0.4% at $87.26 a barrel by lunchtime.

In equity markets, Pernod Ricard slumped as the French drinks maker reported a drop in annual sales, highlighting continued softness in the US and weak demand in China.

French civil engineering construction company Eiffage was also in the red after its first-half adjusted operating income came in below estimates.

Prudential lost ground despite raising its share buyback programme after reporting strong first-half results, which showed adjusted operating pre-tax profit at the insurance and asset management company were up 10% at $1.52bn.