European shares saw little change on Tuesday as a decline in technology stocks offset gains made by healthcare companies. Germany’s DAX underperformed, primarily due to weakness in tech stocks and a 1.9% drop in shares of SAP, the country’s largest software maker. This drop was influenced by U.S. peer Oracle’s disappointing revenue forecast, which projected below-target current-quarter revenue due to challenging economic conditions affecting cloud spending by businesses.
The broader pan-European STOXX 600 index remained flat, reflecting the mixed performance across sectors. Healthcare stocks, on the other hand, demonstrated strength, with drugmakers Novartis, Novo Nordisk, and Roche posting gains ranging from 0.5% to 1.8%.
In the UK, the FTSE 100 rose by 0.4%, supported by a weaker pound following labor market data. The data indicated weakening labor market conditions, even as wage growth remained robust in July, presenting an unclear picture ahead of the Bank of England’s interest rate decision next week.
Investors are keeping a close eye on U.S. inflation figures scheduled for release on Wednesday, as they could provide insights into future interest rate changes, following the Federal Reserve’s ongoing consideration of further policy tightening.
Among other notable developments, engine supplier Pratt & Whitney’s warning about a rare manufacturing flaw that could impact Airbus jets led to a 1.1% decrease in Airbus shares. Meanwhile, Associated British Foods’ shares rose by 1.4% after the company raised its full-year profit outlook for the second time in four months, citing strong performance in its fast-fashion clothing and food operations.
In contrast, Smurfit Kappa, based in Ireland, saw a 10.6% drop in its shares after agreeing to merge with WestRock, creating one of the world’s largest paper and packaging producers valued at nearly $20 billion.