European Stocks Steady as AI Spending Worries Offset DAX Rally
European stocks ended the day flat as worries about Microsoft Corp.’s dwindling spending on data centers tempered positivity from the German election outcome.
The Stoxx Europe 600 Index was little changed at the close in London. An index of German mid-cap shares gained 1.5%, trimming a gain of as much as 2.8%, as investors were optimistic about the ability of the new government led by Friedrich Mertz and CDU/CSU to push through much-needed economic reforms. The large-cap DAX Index gained 0.6%.
Electrification stocks, including Siemens Energy AG, ABB Ltd and Schneider Electric SE, fell as concerns grew around data-center spending after Microsoft canceled leases for a substantial amount of data-center capacity in the US.
The focus will remain on Germany’s policy decisions as the country grapples with stagnating growth, Russia’s war in Ukraine and US President Donald Trump’s tariffs threats. Merz needs to form a coalition fast, in order to push through the necessary changes. Moving away from fiscal restraint is the policy imperative, according to Geoff Yu, senior macro strategist at BNY.
Source : Bloomberg
