Europe open: Shares fall as investor fears over AI spark tech sell-off

(Sharecast News) - European shares were lower at the open on Friday amid another sell-off in tech stocks as investor fears heightened over the reality of financial returns from artificial intelligence.

The pan-regional Stoxx 600 index was down 0.08% in early deals with major bourses lower. Italy's MIB bucked the trend with a 0.44% gain.

US shares had tumbled overnight as renewed concerns over heavy AI spending weighed on sentiment and oil prices jumped amid rising geopolitical tensions.

The sentiment spilled over into Asian markets with South Korea's tech heavy Kospi index slumping almost 2% before a late rally saw most regional exchanges edge ahead at the close.

Energy prices also weighed on sentiment after reports in The New York Times suggested the US and Israel were preparing renewed strikes against Iran following next month's mid-term elections.

US President Donald Trump said late on Wednesday that Washington was not negotiating with Tehran and that something would happen "fairly soon". As a result, Brent crude futures were 1.48% higher at $114.46 a barrel, while West Texas Intermediate was up 1.42% at $100.89.

"Widespread reports that the US is considering renewed military strikes on Iran after the midterm elections rather than pursuing a diplomatic route was enough for the price to pop, after what many had considered would be a brief conflict is now in its eighth month," said Interactive Investor head of markets Richard Hunter.

Safehaven flows lifted US Treasuries, with the benchmark 10year yield dropping more than 17 basis points to 4.97%, its lowest level in almost a month, while the twoyear yield also fell sharply, shedding over 16 basis points to 4.66%. French bonds, which surged amid political violence last weekend, were down 1.3 basis points but still above 5% on Friday.

In equity news, Volvo Cars tanked as the Swedish auto maker said it plans to cut 2,500 jobs as a severe decline in its Chinese market hit earnings in the third quarter.

shares in ENI rose as the Italian energy giant announced a �1.3bn special dividend and increased its share buyback programme after benefiting from stronger production, higher commodity prices and exceptional refining margins.

Kering shares slumped after third quarter results revealed falling revenues.

Reporting by Frank Prenesti for Sharecast.com