July 28 - European equities ended the morning session broadly subdued as concerns in the technology sector were offset by earnings-related strength in luxury, household goods and premium auto stocks, with lower crude prices providing an extra tailwind.
The pan-European STOXX 600 index was steady at 645.32 as of 0703 GMT. The technology sector led declines, slipping about 0.8% after having fallen nearly 2% in the previous session.
Investor sentiment in technology was dented by a report that China has begun producing domestically developed immersion deep-ultraviolet lithography machines - a critical chip-making technology long dominated by one key Dutch supplier. That report prompted a selloff in semiconductor names: U.S. chipmakers closed lower overnight and Asian semiconductor peers were also retreating on Tuesday. In early European trading, shares of ASML were down around 2%.
Against that backdrop, several consumer-facing groups posted notable gains on the back of quarterly results. The personal and household goods sector rose roughly 1.8%. Unilever jumped about 5.3% after reporting second-quarter sales above growth expectations, driven by higher volumes and price increases. Luxury heavyweight LVMH climbed roughly 2.5% after reporting a 3% rise in second-quarter sales, which the company attributed in part to resilient demand from U.S. shoppers.
Mercedes-Benz also outperformed, gaining about 3.3% after the German premium carmaker reported a 22% increase in second-quarter operating profit, while simultaneously flagging weakness in its core cars business.
Market participants are watching earnings from major U.S. technology companies this week for indications about the durability of the AI-driven market rally. Attention is also turning to the U.S. Federal Reserve, which is set to announce its monetary policy decision on Wednesday.
Market context
- STOXX 600 at 645.32 as of 0703 GMT
- Technology sector down about 0.8% after near 2% fall prior session
- ASML down approximately 2% in early European trade
- Personal and household goods sector up about 1.8%
- Unilever +5.3%; LVMH +2.5%; Mercedes-Benz +3.3%
Overall, markets showed a mix of sector-level divergence: investor caution in technology and semiconductors was countered by confidence in companies able to report stronger-than-expected sales or profits, while commodity-driven relief from lower oil prices provided supplementary support to broader indices.