European shares slipped on Thursday, dragged down by sharp losses in French electrical equipment maker Legrand (PA: LEGD) after it reported weaker-than-expected sales growth. The disappointing results added pressure to a market already uneasy about elevated valuations in tech-related sectors.
As of 08:18 GMT, the pan-European STOXX 600 index edged 0.2% lower to 570.58 points, extending this week’s cautious trend across global equity markets. Investor sentiment remained fragile, with traders opting to lock in gains after recent highs.
Legrand’s stock plunged 11.2%, triggering a temporary trading halt after the company reported 11.9% sales growth for the first nine months of the year—slightly below market expectations. The firm cited U.S. tariffs as a key drag on revenue, particularly in its data center equipment division.
Other industrial and tech-linked manufacturers followed suit, with Schneider Electric and Siemens Energy each losing about 2%, as investors reassessed growth prospects amid tighter global trade conditions.
Tech Valuation Fears Resurface
This week’s downturn comes amid renewed concerns that technology and industrial stocks may have become overvalued after months of strong gains. Analysts warned that even minor earnings disappointments could trigger sharp corrections in high-multiple sectors.
European equities have mirrored the global pullback, following Wall Street’s recent volatility in major tech indices. Investors are becoming more selective, seeking value in defensive sectors such as consumer staples and healthcare.
Market analysts pointed to a combination of factors weighing on sentiment:
- Persistent concerns about U.S. and European interest rate trajectories
- Ongoing geopolitical tensions affecting trade and supply chains
- Uncertainty surrounding corporate profit margins heading into year-end
These elements, combined with a cautious outlook from major industrial firms, have made investors more risk-averse in recent sessions.
Mixed Corporate Earnings Drive Movers
While Legrand’s slump dominated headlines, several other major companies posted contrasting results.
Commerzbank (DE: CBKG) fell 2.3% after the lender reported an unexpected drop in third-quarter net profit, pressured by higher taxes and operating costs.
In contrast, Zalando (DE: ZALG) surged 6.7% after posting a 21.6% rise in gross merchandise volume for the third quarter, signaling strong momentum in its online fashion business despite a slowing European economy.
As the fourth quarter unfolds, analysts expect continued sector rotation within European markets, with investors balancing between defensive positioning and selective exposure to growth-oriented stocks.
