European stocks fall 1.6% as the wave of selling in the technology sector accelerates globally

European stocks opened trading on Friday lower, amid declines across various sectors, with the wave of selling accelerating in global markets, concluding a difficult week for investors who face a state of uncertainty regarding artificial intelligence stocks, following the Democrats’ control of the US Congress.

The comprehensive European Stoxx 600 index fell by 1.6 percent to 644.72 points by 08:10 GMT, while the main indices in most major European markets fell by more than 1 percent each, according to Reuters.

Friday's losses erased the index's gains during the week, declining by about 0.2 percent. The European index was relatively less affected this week compared to its counterparts in Asia and Wall Street, due to its limited exposure to artificial intelligence stocks.

Shares of the media, healthcare and retail sectors led the broad decline, falling by more than 2 percent each.

Fears that Congress, led by Democrats, will seek to impose restrictions on spending on artificial intelligence data centers, have raised further concerns about weak returns, high valuations and debt-financed investments.

A slowdown in spending on artificial intelligence would put pressure on the global economy, which has been supported by huge investments by major technology companies.

In the technology sector, shares of “Celtronic” fell by 2 percent, and “ASMI” by 1.3 percent, while shares of artificial intelligence equipment companies, such as “Schneider Electric” and “Siemens Energy,” recorded slight declines.

In terms of business results, Teleperformance's stock fell by 18 percent, after the company lowered its revenue growth expectations during the entire year, due to the weak performance of trust and safety activities in the outsourcing business, which exceeded the impact of growth in its services supported by artificial intelligence and back-office services.

Copper prices fell on Friday, heading towards recording their largest weekly decline on the London Metal Exchange since March, in light of a sharp selling wave in technology company shares that cast a shadow on the markets.

The price of standard copper, for three-month delivery, on the London Metal Exchange fell by 1.3 percent to $13,663 per ton, by 07:00 GMT, heading to record a weekly loss of 3.44 percent, according to Reuters.

On the Shanghai Futures Exchange, the most actively traded copper contract fell 1.08 percent to 106,830 yuan ($16,018.17) per ton.

Craig Lang, chief analyst at CRU, said that this decline reflects concerns about artificial intelligence investments, noting that copper prices are becoming increasingly affected by “investor sentiment regarding the expansion of the establishment of data centers.”

Shares of technology companies were under severe pressure, after Democratic victories in the US midterm elections raised fears of the imposition of new regulatory oversight that might limit the expansion of artificial intelligence infrastructure.

On the other hand, supply constraints contributed to limiting the decline in copper prices.

“I would be cautious in describing what is happening as a sustainable correction, given the continuing challenges facing mine supplies and the exceptional scarcity of mineral availability outside the United States,” Lang said.

Copper stocks in warehouses monitored by the Shanghai Futures Exchange fell by more than 24 percent during the week, to only 33,848 tons, their lowest level in about three years.

At the same time, the copper price premium at Yangshan Port, which is closely monitored as an indicator of the import appetite of China, one of the most prominent consumers of the metal, rose to $210 per ton on Thursday, equaling its record high level.

Copper smelters in China are facing dual pressures, represented by the shift in copper processing and smelting fees to negative levels, in addition to the decline in sulfuric acid prices.

Meanwhile, inventories in warehouses outside the United States declined, with quantities of the metal being withdrawn to the American market in anticipation of possible tariffs on imports of refined copper.

"These physical restrictions on supplies should provide some support to prices in the face of declining investor sentiment," Lang said.

Other mineral movements

On the London Metal Exchange, aluminum fell by 0.54 percent, zinc by 1.42 percent, lead by 0.45 percent, and nickel by 0.23 percent, while tin rose by 0.83 percent.

As for the Shanghai Stock Exchange, aluminum fell slightly by 0.04 percent, zinc by 1.35 percent, and lead was almost stable, declining by 0.03 percent. In contrast, nickel rose by 2.14 percent, while tin fell by 3.45 percent.

Metal inventories in Shanghai stock exchange warehouses fell broadly during the week, led by sharp declines in aluminum and lead inventories.

Indian government bonds topped the performance of emerging markets in Asia this week, while the rupee regained its attractiveness among emerging market currencies, supported by the decline in oil prices and US Treasury bond yields, and the shift of global investors’ attention away from markets related to the artificial intelligence sector, which eased pressures on the Indian currency and reduced market bets on a sharp rise in interest rates by the Reserve Bank of India.

This shift came in the wake of the Democrats' victory in the US midterm elections, and the accompanying decline in oil prices and US Treasury bond yields, as well as growing concerns about the sustainability of massive spending on artificial intelligence infrastructure and the high valuations of technology companies.

The yield on the benchmark Indian 10-year bond, due in 2036, which carries an interest rate of 6.94 percent, recorded 7.1973 percent by 11:40 am local time, rising by 2.5 basis points during the day, but it fell by about 22 basis points during the week, heading for its best weekly performance since April, according to “Reuters”.

In contrast, the yield on 10-year US Treasury bonds has declined by about 10 basis points since the beginning of the week, which has enhanced the attractiveness of Indian debt with high yields. Indian bonds also outperformed their counterparts in Indonesia, the Philippines, China, Malaysia and Thailand.

Foreign investors returned to the Indian debt market, buying bonds worth approximately 52 billion rupees ($552.28 million), their largest net weekly purchases since July.

Rohit Agarwal, co-founder of Bequest Capital, a family wealth management company in Dubai, said: “Currency stability, oil prices and global interest rate expectations are still major factors, and we believe that India is receiving increasing interest from global bond investors.”

Indian stocks and the rupee also benefited from the shift in global market sentiment. The rupee rose by about 1 percent to 94.10 against the dollar, while the benchmark Nifty 50 index rose by 6.7 percent during the week, reaching 24,612 points.

A shift in investor attitudes

The Indian rupee is regaining its attractiveness among emerging market currencies after spending most of the year under pressure, with the decline in global investment momentum in artificial intelligence stocks, which brought markets that had not received sufficient attention back into the circle of investors’ attention.

During most of 2026, global investors favored tech-heavy markets, particularly in the United States and North Asia, to enhance their exposure to the AI ​​sector. This investment concentration negatively affected India, given its stock market's limited exposure to the semiconductor sector and artificial intelligence infrastructure supply chains, which put pressure on stocks and the rupee.

But this equation is beginning to show initial signs of change. Concerns about the sustainability of huge spending on artificial intelligence infrastructure and rising company valuations were already challenging the rise in technology stocks, before the Democratic Party achieved a sweeping victory in the US midterm elections.

Investors fear that the new American political landscape will lead to increased oversight of artificial intelligence companies and increased scrutiny of the expansion of data centers.

In this context, the “Fear” index, which measures Wall Street’s volatility, jumped on Thursday, while the “Nasdaq” index fell by 5.5 percent, recording its largest daily decline since what was known as “Liberation Day” in April 2025.

Analysts at JP Morgan, Goldman Sachs, and BlackRock have highlighted in recent weeks the relative attractiveness of the Indian market, if global investors tend to diversify their investments away from markets with high exposure to artificial intelligence, pointing to the diversity of the Indian stock market and its reliance on local growth engines that provide an investment alternative.

There are signs that this transformation is beginning to materialize, as foreign investors have intensified their purchases of Indian stocks, approaching $3 billion during the current week, including purchases worth $1.6 billion on Thursday alone, which is the largest in one day in about six years.

The return of foreign capital inflows into Indian stocks would provide important support to the rupee, especially after a long period of exits.

The rupee was among the best-performing currencies in Asia during the week, and also topped the region's currencies on Friday, at a time when most other Asian currencies declined.

The Indian currency rose to its highest level in six months at 94.10 against the dollar, bucking the general trend in the region, after it had recorded a record low level of 96.96 in May.

Radhika Rao, chief economist and executive director at DBS Bank, said that the relative stability of the rupee enhances returns calculated in dollars for foreign investors, while the decline in oil prices constitutes a “remarkable” supportive factor for India, the third largest energy importer in the world.

Brent crude fell by about 20 percent this week, heading towards recording the largest weekly decline since April 2020, amid expectations that the US President, weakened by the election results, will seek to end the conflict with Iran.

Interest rates

In the derivatives market, the one-year overnight interest rate swap (OIS) rate fell by 32 basis points during the week to 6.40 percent, the two-year rate fell by 34 basis points to 6.40 percent, while the five-year rate fell by 37 basis points to 6.49 percent.

After the decline in oil prices, market estimates of interest rate increases by the Reserve Bank of India fell to about 50-75 basis points, compared to previous expectations of an increase of 125 basis points, according to a trader in a private sector bank.

The decline in oil has eased pressures on India's inflation expectations, weakening the justification for pre-emptively tightening monetary policy. Low crude prices also reduce pressure on the country's trade balance and public finances.

Alok Singh, head of treasury at CSB Bank in Mumbai, said that the possibility of reaching an agreement between Iran and the United States has strengthened the sentiment of the Indian markets, adding that any additional decline in the 10-year bond yield will remain dependent on reaching a settlement of the Iranian crisis and a decline in crude oil prices below $90 a barrel.