European Markets Under Pressure as BMW Boosts Auto Stocks

The sell-off in technology shares on Wall Street is making investors on European stock markets nervous.

Profit-taking pushed the DAX and EuroStoxx50 down by around one percent midweek, to as low as 23,746 and 5,605 points respectively. The trigger was concern over high stock valuations, which spread from Wall Street and Asian markets to Europe. Additionally, a series of mixed corporate earnings reports unsettled investors.

"It's a combination of factors, and investors are now questioning the high valuations since there is no official data from the US to support this momentum," said Daniela Hathorn, analyst at broker Capital.com. Comments from the heads of major US banks Morgan Stanley and Goldman Sachs, who expressed doubts about the lofty equity valuations, echoed from across the Atlantic. The ongoing US government shutdown also contributed to the nervousness. "The US government shutdown enters its 36th day today, making it the longest in American history," noted CMC Markets analyst Luis Ruiz.

TECH STOCKS SLIDE

Among individual sectors, technology was particularly under pressure. The corresponding European sector index fell by as much as 1.8 percent. Shares of ASM International and BE Semiconductor each plummeted more than four percent at their lows. The previous day, the US tech-heavy Nasdaq index had lost two percent on Wall Street.

Danish medical technology firm Ambu also took a hit, with shares plunging as much as 18.6 percent after a missed forecast. In contrast, shares of Novo Nordisk managed to recover their early losses despite a guidance cut. The Danish pharmaceutical giant's stock climbed almost three percent at its peak, having previously fallen by nearly five percent. According to experts, investors welcomed the outcome of price negotiations with the US government. JP Morgan analysts described the agreement as "better than feared."

BMW DRIVES AUTO STOCKS HIGHER

Counter to the broader trend, the auto sector gained more than one percent at times. BMW shares surged as much as 2.6 percent, temporarily leading the DAX after the release of quarterly results. Daimler Truck, Mercedes-Benz, and Volkswagen also rose between 1.3 and 2.8 percent at their highs. "BMW is creating a positive mood in the sector and lifting others along with it," commented one trader. Positive analyst commentary also contributed. "The first signs of stabilization in BMW's Chinese business are what really matter," said JP Morgan analysts, noting the potential for positive momentum across the sector.

A disappointing outlook, however, sent Siemens Healthineers shares tumbling. The medical technology company's stock plunged as much as 12.7 percent, putting it on track for its biggest one-day loss to date. "Even though the company is known for conservative forecasts, the very weak profit outlook for the 2025/26 fiscal year is weighing on the stock," said one trader.

At the halfway point of earnings season, European companies are faring better than expected overall, though they continue to lag behind their US counterparts. According to financial market data from provider LSEG, analysts have become more optimistic about European companies' third-quarter profits, now expecting an average increase of 4.3 percent. Just a week earlier, market watchers had forecast just a 0.4 percent gain.

(Reporting by Stefanie Geiger, edited by Christian Gotz. For queries, please contact our newsroom at [e-mail] (for politics and economy) or [e-mail] (for companies and markets)