Rising interest rates, high valuations and doubts about the profitability of the AI boom are driving investors out of technology stocks. Infineon, Aixtron and Suss Microtec in particular are coming under pressure on the Frankfurt Stock Exchange.
European stock markets have followed the sell-off in the technology sector in the US and Asia. However, the lower share of chip stocks and an easing situation on the oil and bond markets limited the price losses. The Dax was around half a percent lower at 25,173 points around midday. The EuroStoxx50 lost around one percent to 6,133 points. The European technology industry index lost three percent. In Frankfurt, the shares of Infineon, Aixtron and Suss Microtec fell by eight to nine percent.
"Investors' nervousness is increasingly easing after higher-than-expected US consumer prices have further exacerbated the already tense market environment," said Andreas Lipkow, chief analyst at broker CMC Markets. The technology-heavy leading indices in Japan and South Korea had closed in the morning around five and 7.5 percent in the red, while the Nasdaq in the USA was down almost two percent on Wednesday. "These are not classic profit-taking. This is a real concern about a massive correction. With classic profit-taking, the pace of sales would be significantly slower," commented Thomas Altmann, portfolio manager at asset manager QC Partners. The high valuations of technology stocks are increasingly viewed critically. The increased interest rates, which increase financing costs, are adding to the worries.
The fear of a wave of bankruptcies among data center operators drove up the costs of insuring against such events. Investors are increasingly doubting that the billion-dollar investments in the infrastructure for artificial intelligence (AI) will pay off. According to data from S&P Global Market Intelligence, the credit default swaps (CDS) on bonds from the cloud provider Oracle increased in price by 26 basis points on Thursday and reached a record high of 288 basis points. This means that investors have to pay an annual premium of $288,000 for a ten million dollar package of Oracle bonds in order to protect themselves against a default by the US company, which is more than $120 billion in debt.
Even the surprisingly strong results of the Taiwanese semiconductor company TSMC did not reassure investors in the technology sector, said CMC Markets expert Lipkow. "If even good news is no longer bought but is used to exit, that is a clear warning signal for the stock markets." However, a stabilization in the oil and bond markets provided some relief on the broader stock market. Investors' flight from riskier stocks to government bonds reduced yields, which had recently risen rapidly. The price of North Sea crude oil Brent also ended its rise and fell by around 1.5 percent to $104.54 per barrel (159 liters). According to a US government official, the administration of US President Donald Trump is considering easing sanctions against ships in the so-called shadow fleet that have transported oil and oil products from Russia, Iran and Venezuela, among others.
Among individual stocks outside the technology sector, Drägerwerk shares slipped by around 15 percent after negative business figures. This made them the biggest losers in the SDax. The medical technology group earned less in the third quarter than a year ago.
Ericsson's shares were on the winning side, gaining 8.3 percent on the Stockholm stock exchange. The telecommunications equipment manufacturer reported a smaller decline in profits than expected for the third quarter and exceeded expectations in terms of sales. This helped the entire telecom sector achieve an increase of almost two percent.
