Written by: Fatima Younes
European financial markets saw a noticeable decline at the end of Thursday's trading, driven by a wave of selling in the global technology sector. This drop coincided with renewed concerns regarding artificial intelligence company valuations following disappointing earnings results from some major tech firms in the United States, which negatively affected global market indices.
Sharp decline in major indices
The French CAC 40 index led the losses, recording a decline of 1.39%, leading to a loss of 110 points and closing the index at 7811 points. The German DAX index was not immune to this decline, as it recorded a sharp drop of 1%, losing 273 points to close at 25371 points.
In the United Kingdom, the FTSE 100 index closed down 0.26%, recording a drop of 27 points to settle at 10725 points. Regionally, the downward wave extended to the STOXX Europe 600 index, which fell by 1% to close at 637 points, erasing the previous session's gains amidst investor anticipation of corporate earnings and political turmoil in France.
Pressure on the French bond and debt market
Markets were also affected by increased pressure on the French bond market, as the yield on 10-year French bonds jumped to 5.1415%, the highest level recorded since 2002. This rise led to a widening of the French debt risk premium, with the spread between 10-year bond yields in France and Germany reaching 174 basis points at the close, recording high levels that recall the European debt crisis of 2011.
