European stock markets were relatively quiet on Thursday, seeing a small dip overall. The main reason for the decline was the poor forecast from the American cloud company Oracle, which caused technology stocks to fall. This negative news overshadowed the relief felt after the US Federal Reserve made comments that were less aggressive about future interest rate hikes than investors had anticipated.
The general European STOXX 600 index, along with major markets like London and France, was down by about 0.1% to 0.3%. The technology sector specifically dropped about 0.9%, with the German software company SAP falling 2.5% because Oracle’s disappointing sales and profit predictions, combined with increased spending plans, brought back worries about the high valuations and returns on investments in artificial intelligence.
Although the Federal Reserve indicated that it might not cut interest rates immediately until the job market stabilizes, which was a positive signal for investors, it wasn’t enough to counteract the tech sector’s decline.
In other company news, Delivery Hero shares dropped 5% after a downgrade from Citigroup, while Drax in London rose 2.2% after predicting higher-than-expected yearly profits, and RS Group was the top performer on the STOXX 600, gaining 3% after an analyst upgrade.
On the FX front, the US dollar received some support on Thursday because there was a general avoidance of risk across the markets.
However, it couldn’t fully recover the ground it lost the previous day against other major currencies like the euro, yen, and sterling, mainly because the Federal Reserve’s recent announcement was not as aggressive as some investors had anticipated.
The euro remained stable at 1.1704 (a two-month high) after a significant gain on Wednesday, and the British pound held steady at 1.13374 following a similar rise. The dollar also continued to weaken against the Japanese yen, dipping 0.14% to 155.8 yen.
Meanwhile, the Swiss franc reached its strongest level against the dollar in nearly a month, trading at 0.7992 per dollar.
The Australian dollar suffered from the same risk-aversion trend, falling 0.5% to 0.6644. Reflecting the broad drop in risk appetite,
Bitcoin briefly fell below the 90,000 mark, and Ether dropped more than 4% to 3,200..
Currency Power Balance