European Markets Slide Amid Tech Stock Declines and Defence Sector Strain

European equities saw a downturn on Wednesday, pulling back from the highs seen in the previous session. The tech sector mirrored the struggles faced by Wall Street, contributing to the decline. The defence sector also experienced another day of challenges.

The pan-European STOXX 600 index fell by 0.4% by early morning, with major exchanges showing losses. In the UK, the FTSE 100 index dropped by 0.2% as inflation surged to 3.8% in July, its highest level since early 2024, aligning with the Bank of England's forecasts.

In the geopolitical sphere, President Donald Trump suggested potential air support for Ukraine, excluding ground troop deployment. This news, coupled with hopes for a Ukraine-Russia summit, drove defence stocks down by 1.5% early in the trading day. Technology stocks also declined, hit by fears of an AI stock bubble and unclear interest rate paths.

(With inputs from agencies.)