European stock markets traded higher in choppy dealings on Thursday, supported by a rebound in technology shares as investors weighed geopolitical developments in the Middle East and signs of continued strength in artificial intelligence-related demand, as per a Reuters report.
The pan-European STOXX 600 index rose 0.4% to 638.66 in early trading, recovering part of the sharp losses recorded in the previous session. According to Reuters, market sentiment improved after U.S. President Donald Trump indicated that Iran wanted to negotiate, easing some concerns over an escalation in the regional conflict.
Technology stocks lead gains
Technology stocks emerged as the top-performing sector, climbing 1.6% after a recent pullback. The sector had delivered its strongest quarterly performance since 2001 in June but had come under pressure this month as investors questioned elevated valuations.
Chipmakers spearheaded Thursday's advance, with Germany-based Siltronic surging 7.4%, France's Soitec gaining 5.5%, and Dutch semiconductor equipment giant ASML rising 2.5%.
Reuters reported that investor sentiment also received a boost from reports suggesting China could permit domestic artificial intelligence companies limited access to Nvidia's H200 chips, potentially supporting further investment in AI infrastructure.
Oil prices ease despite geopolitical uncertainty
Crude oil prices edged lower as investors monitored the evolving situation in the Middle East. Oil remains a critical input for Europe's largely energy-importing economies, making price movements closely watched by equity investors.
According to Reuters, markets continued to assess the implications of the latest U.S. military strikes on Iran, which followed President Trump's declaration that negotiations with Tehran had ended. The geopolitical tensions had triggered the STOXX 600's biggest one-day decline since March in the previous session.
Spanish equities outperform
Spain's benchmark equity index outperformed regional peers, rising 0.9% after hitting a three-week low on Wednesday.
Reuters attributed the rebound to improved investor sentiment after President Trump described Spain as "very generous" following earlier trade-related tensions linked to the country's NATO spending commitments.
AstraZeneca tumbles after trial setback
Healthcare stocks faced pressure after AstraZeneca fell 8%.
The decline came after Reuters reported that the pharmaceutical company's nerve disease treatment Wainua, developed in partnership with U.S.-based Ionis Pharmaceuticals, failed to achieve the primary objective of reducing cardiovascular deaths and recurrent heart complications in a late-stage clinical trial.
Market outlook
European equities remain highly sensitive to geopolitical headlines, energy price movements and developments surrounding artificial intelligence spending. While Thursday's recovery in technology shares provided support to broader markets, investors are likely to remain cautious as they monitor the Middle East situation, global trade developments and corporate earnings for further direction.
