Europe open: Shares retreat again over AI valuation fears

(Sharecast News) - European shares continued their retreat on Wednesday as global fears about the valuation of AI companies dogged sentiment again.

The pan-regional Stoxx 600 index was down 0.27% at 569 by 0833 GMT with all major bourses lower. Germany's DAX fell 0.52%, France's CAC 40 declined 0.27% and Italy's FTSE MIB was 0.06% lower.

"Halloween may be over, but markets are feeling spooked over AI stock valuations fears. Overnight, the S&P 500 fell 1.18% and the Nasdaq pulled back 1.84%, as Wall Street giants including Morgan Stanley and Goldman Sachs warned that AI stocks were in bubble territory," said Emma Wall, chief investment strategist at Hargreaves Lansdown.

"The negative momentum rippled through Asian markets in the early hours this morning, with Bloomberg estimating a total of $500bn wiped off semi-conductor stock valuations globally.

"The concerns are valid. While a number of AI firms have benefits from strong revenue and profit growth, this has been a narrow and extreme rally. Earlier this year, following both the DeepSeek disruption in January and the tariff tantrum in April, returns seemed to be more broad-based, with the equal weighted S&P 500 outperforming the market cap for periods."

"But this did not last, and once again high growth, tech biased, AI focused businesses have delivered much of the aggregate S&P 500 returns over the past six months."

Chipmakers were all lower as a result, with BE Semiconductor and ASM International falling.

Among other equity news, Vestas Wind Systems surged after results.

Reporting by Frank Prenesti for Sharecast.com