European shares slip on global tech slump; Zalando down on regulator action
European shares slip on global tech slump; Zalando down on regulator action Updates prices; adds details and analyst comments
By Utkarsh Hathi and Johann M Cherian
June 26 (Reuters) - European shares declined on Friday, with technology shares tracking global sector weakness, while Zalando fell after Germany's financial regulator launched a probe into the retailer's accounts.
The pan-European STOXX 600 index .STOXX was down 0.6% at 636.40 at 0832 GMT, retreating from a record-high close in the previous session, and was on track for a weekly gain.
Shares of Zalando ZALG.DE slid 4.3% after BaFin launched an investigation into the online fashion retailer's 2025 financial statements, citing evidence the company breached accounting regulations. The broader retail sector .SXRP lost 0.2%.
Meanwhile, uncertainty around the global technology sector prevailed, with investors focused on a surge in memory chip costs as a result of strong AI-driven demand. Asian equities fell sharply overnight, while Wall Street's tech-heavy Nasdaq futures lost about 1%.
In Europe, the tech sector .SX8P fell 1.4%.
Chipmakers Infineon IFXGn.DE and STMicroelectronics STMPA.PA slipped 3% and 2.4%, respectively. On the other hand, semiconductor equipment makers BE Semiconductor BESI.AS and ASML ASML.AS dropped 2.5% and 1.1%, respectively.
AI equipment maker Schneider Electric SCHN.PA shed 1.8%.
"The realities of rising memory costs are being felt across other sectors," said Craig Cameron, portfolio manager at Templeton Global Investments.
"The market has largely expected this kind of shift and clearly we've reached a point where, from a consumer and smartphone and PC-type perspective, it just doesn't make any sense to keep prices flat when memory is becoming such a large portion of costs."
Telecom companies Ericsson ERICb.ST and Nokia NOKIA.HE were also down 1.4% and 2.3%, respectively.
The benchmark was set for modest weekly gains, as easing oil supply concerns following the reopening of the Strait of Hormuz helped Brent Crude retreat to pre-conflict levels, while Europe's smaller tech exposure helped cushion the losses seen in regional equities.
The STOXX tech index now outperforms the S&P 500 tech sector .SPLRCT on an annual, monthly and quarterly basis, also due to the Wall Street index's bigger exposure to software companies.
U.S. inflation broke above 4% for the first time in three years in May, reinforcing expectations for a rate hike from the Federal Reserve this year.
Traders are pricing in another 25 basis point interest rate hike by the European Central Bank by year-end.
Among others, automaker Volkswagen VOWG.DE shares were up 0.7%. A report said the company aims to slash up to 100,000 jobs over the next few years.
London-listed shares of Wise WISEa.L climbed 8% after the money transfer company reported strong growth in customers and announced a share buyback plan worth $500 million.
(Reporting by Utkarsh Hathi and Johann M Cherian in Bengaluru; Editing by Sherry Jacob-Phillips and Joyjeet Das)