Europe midday: Tech stocks hammered as global AI debt fears spread

(Sharecast News) - European shares were mixed on Thursday as an overnight tech sell-off in the US and Asia spread to Continental markets with investors fretting over increasing debt mountains to fund artificial intelligence.

The pan-regional Stoxx 600 index was down 0.29% to 635 at 1052 GMT. Sentiment was also dampened by data showing US inflation accelerated to 3.7% in September, fuelling expectations that the Federal Reserve could tighten monetary policy further and keep interest rates higher for longer.

Investors are worrying about whether the vast outlay to build water and power-hungry data centres will generate meaningful returns relative to the billions being outlaid in capital expenditure.

France's CAC 40 edged ahead by 0.11% despite official data confirming harmonised inflation jumped to 3.4% yearonyear in September 2026, up from 2.6% in August and marking the highest rate since January 2024, driven largely by surging energy prices and rising food costs.

UK shares were higher after monthly GDP grew by 0.1% in August, beating expectations of a fall of 0.1%.

In Asia, home to some of the chip industry's biggest names, shares fell sharply with South Korea's Kospi down by as much as 8%, triggering a temporary trading halt. Samsung and SK Hynix fell more than 10%.

"Global equities sold off sharply as the chip sector came under renewed pressure, raising fresh doubts about the durability of the AI-led rally," said Patrick Munnelly market strategy partner at Tickmill Group.

"The scale of the move reflects a broader reassessment of AI positioning. Investors are questioning whether the enormous capital being committed to AI infrastructure will generate sufficient returns, particularly with valuations elevated, supply-chain bottlenecks visible and competition intensifying."

On the economics front, industrial production across the eurozone unexpectedly declined in August, according to data on Thursday from Eurostat, with output falling for the third consecutive month on the back of heavy falls in Belgium and Ireland.

Seasonally adjusted industrial production across the single currency bloc fell by 0.5% month-on-month, following declines of 0.3% in July and 0.1% in June.

Industrial output has now been falling after growing for four months straight between February to May.

In equity news shares in Ericsson surged after the telecom equipment maker beat third quarter profit forecasts, while drinks giant Pernot Ricard also gained after results.

Paper and packaging firm Mondi slumped after a trading update, while tech stocks followed their overseas counterparts lower, led by AT&S Austria, ASM International, Soitec, Aixtron and Infineon.

Reporting by Frank Prenesti for Sharecast.com