Europe open: Stocks lower as tech sell-off hits sentiment, banks in focus

(Sharecast News) - European stocks pulled back from a seven-week high on Friday as a sell-off across the global tech sector hit market sentiment, while investors digested another busy day for corporate earnings and the European Central Bank's latest announcements.

The Stoxx 600 index was 0.3% lower at 647.43 early on, retreating from the 649.11 closing price on Thursday, its highest close since 8 September.

Tech stocks across the US and Asia were firmly out of favour in the aftermath of a disappointing reaction to Alphabet's latest results, which saw shares drop 13% on Thursday as the Google parent reignited market concerns about the current scale of AI spending. That sell-off extended to Asia overnight, with semiconductor giants in Tokyo and Seoul under intense selling pressure.

Another jump in the price of oil also dampened risk appetite early on, with front-month Brent crude futures up 2% at $113 a barrel following another attack on a tanker in the Strait of Hormuz.

Meanwhile, investors were still reacting to Thursday's decision by the ECB to leave the deposit rate on hold at 2.5%, as expected, though it signalled a 25-basis-point hike was likely in December. The decision came just hours after the ECB said that president Christine Lagarde plans to step down in February, before the end of her term next October.

European banking stocks were in focus on Friday as investors digested a raft of quarterly results from some of the continent's biggest lenders, including Crédit Agricole, CaixaBank, Erste Group and NatWest.

Crédit Agricole fell after underwhelming with a 7.5% increase in third-quarter revenues, as the French lender highlighted strong performances in asset management and corporate and investment banking.

In Madrid, CaixaBank was flat after reporting a 12.9% increase in net profit to �4.96bn for the first nine months of 2026, supported by increased lending and customer deposits.

Austria's Erste Group was in demand after raising its full-year outlook following a 20.6% increase in nine-month net profit, helped by the consolidation of its Polish banking operations.

In London, NatWest sank after attributable profit fell 4.4% in the third quarter to £1.5bn, while return on tangible equity slipped to 21.6% from 22.3%.

Meanwhile, chipmakers were in the red, tracking the global semiconductor sector lower, including ASM International, Infineon and ASML.

In macro news, Eurozone GDP rose 0.4% in the third quarter, a slowdown from the 0.6% expansion registered in the second quarter. Nevertheless, that was still ahead of the 0.2% consensus forecast.