​​European Markets Fall On Tech Anxiety And Rate Cut Fears

(MENAFN- DailyFX (IG)) ​Oracle's disappointment weighs on global sentiment

​Oracle's quarterly results have sent shockwaves through technology markets, with the database giant's cautious outlook reigniting doubts about the sustainability of AI-related spending. The disappointment has spread across global markets, hitting Asian tech names particularly hard and dragging on European bourses.

​The sell-off highlights how quickly sentiment can turn in high-valuation areas of the market. After months of gains driven by optimism around AI, investors are now questioning whether expected returns will materialise quickly enough to justify current price levels.

​Technology shares across Europe have followed their US and Asian counterparts lower, with semiconductor and software names among the hardest hit. The timing couldn't be worse, coming just as the Fed delivered its latest rate cut – a reminder that even accommodative central banks can't always offset fundamental concerns.

​UK equities under pressure from multiple headwinds

​London markets opened in the red, with cyclical sectors leading the decline. Banks, miners and defence names were among the biggest losers, reflecting broader concerns about growth and the impact of potential rate cuts on financial sector profitability.

​Haven assets are outperforming, with gilts rallying as traders seek safety amid the equity market weakness. The Japanese yen has also strengthened, reinforcing the risk-off tone across global markets.

​BoE rate cut expectations build

​Market pricing for BoE rate cuts has firmed considerably, with traders now assigning an 88% probability to a December reduction. A second cut is now fully priced for June 2026, suggesting markets expect the BoE to proceed cautiously rather than embarking on an aggressive easing cycle.

​The move reflects growing evidence that inflation is cooling faster than anticipated, while economic growth remains subdued. With unemployment ticking higher and consumer confidence fragile, the case for looser monetary policy appears to be strengthening.

​UK housing market shows signs of strain

​UK housing indicators are flashing warning signs, with London property values recording their sharpest declines in over two years. The weakness comes ahead of the budget and the implementation of higher property taxes, which threaten to dampen activity further.

​The London-focused decline is particularly notable given the capital's traditional resilience during previous downturns. It suggests that affordability constraints, combined with economic uncertainty, are finally taking their toll on one of the UK's most robust property markets.

​The housing market's struggles feed into broader concerns about consumer spending and confidence. With property wealth effects playing a significant role in UK consumption patterns, any sustained weakness could have knock-on implications for retailers and consumer-facing businesses.

​Corporate updates and commodity moves

​Corporate news offered mixed signals. Drax guided full-year earnings to the top end of expectations, while NCC Group flagged modest revenue growth. RWS reported in-line earnings and guided for gradual margin improvement, though the shares struggled amid the broader sell-off.

​BP emerged as the top bidder in the latest Gulf of Mexico lease auction, demonstrating continued appetite for oil and gas development despite volatile commodity trading conditions.

​Commodity markets traded mixed, with copper gaining modest support from the Fed's rate cut and ongoing supply tightness. However, broader risk-off sentiment prevented any sustained rally, with industrial metals prices remaining range-bound.

​Asian markets struggled, with Japan's Nikkei 225 sliding as SoftBank tumbled on concerns linked to Oracle's disappointing outlook. Most sectors in Tokyo finished in the red, with technology names bearing the brunt of the selling pressure.

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