European Shares Fall on Bank and AI Earnings Woes

The move came despite euro zone third-quarter GDP rising 0.4% from the previous three months, beating the 0.2% forecast, and Germany posting 0.2% growth. The data pointed to a firmer-than-feared economy, but traders were not willing to chase risk after fresh evidence of pressure in corporate margins and pockets of slowing demand.

France’s economy shrank 0.1% in the quarter, and October consumer prices in the country rose 3.8% from a year earlier, above expectations, while euro zone unemployment ticked up to 6.5%. That mix keeps pressure on the European Central Bank as it weighs still-sticky inflation against uneven growth.

The biggest drag came from technology and semiconductor names after disappointing results from Amazon and Intel revived doubts over the payback on massive AI investment. Soitec sank 9.6%, ASM International dropped 7.6%, STMicroelectronics fell 7.5%, Infineon lost 6.4%, ASML declined 6.1% and BE Semiconductor slid 5.7%.

Banks also weighed on the market. NatWest slumped 8.8% after reporting higher operating profit before tax but weaker net profit and a net interest margin below expectations. Credit Agricole fell 2% even after beating forecasts on revenue and net income, underscoring how high expectations and margin pressure are limiting upside in financials.

Not all earnings were punished. Universal Music Group jumped 7.9% after subscription revenue beat estimates and the company said competitive pressure was easing. AstraZeneca gained 7% after posting a 23% rise in net profit and a 7% increase in revenue, both above expectations. Sanofi rose 4.7% after lifting profit 8% and improving full-year guidance, while Puma climbed 5.6% after narrowing its loss and topping revenue forecasts. BP added 0.5% after saying quarterly net profit quadrupled.

The cross-currents leave European equities in a familiar spot: macro data is holding up better than feared, but investors are still punishing sectors where earnings do not justify valuation, especially AI-linked chips and interest-rate sensitive lenders. The next test will be whether upcoming corporate results and central bank commentary can restore confidence that growth can broaden without forcing a harder policy stance.