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Oct 30 (Reuters) - European shares inched lower on Friday as technology stocks came under pressure from renewed concerns over rising AI investment costs, although the benchmark index was still on track for its best month since June on strong corporate earnings.
The pan-European STOXX 600 index fell 0.29% to 647.23 points by 0929 GMT but was set to post both weekly and monthly gains.
Technology stocks led declines, with the sector index down 2%, after earnings from Amazon and Intel reignited concerns about the sustainability of heavy AI-related spending and the returns it can generate, echoing concerns that have rattled markets several times this year.
"The market is trying to wrestle with the equation about a huge amount of CapEx that's being spent relative to the timeline of a return on investment. And at the moment, they don't have an answer to that," said Michael Hewson, chief analyst at MCH Market Insights.
Sector heavyweight ASML fell 5%, while STMicroelectronics, BESI and Infineon fell between 3.3% and 4.8%.
Chip stocks Soitec and Aixtron fell 5.7% and 3.6%, respectively.
Political unrest in France also weighed on sentiment this month, as the country faces mounting pressure from rising living costs and elevated government debt, driving French bond yields to multi-year highs.
"The market is trying to wrestle with the equation about a huge amount of CapEx that's being spent relative to the timeline of a return on investment. And at the moment, they don't have an answer to that," said Michael Hewson, chief analyst at MCH Market Insights.
Sector heavyweight ASML fell 5%, while STMicroelectronics, BESI and Infineon fell between 3.3% and 4.8%.
Chip stocks Soitec and Aixtron fell 5.7% and 3.6%, respectively.
Political unrest in France also weighed on sentiment this month, as the country faces mounting pressure from rising living costs and elevated government debt, driving French bond yields to multi-year highs.
Sanofi gained 5.4% after the French pharmaceutical firm reported third-quarter results ahead of analyst expectations and lifted its outlook.
Among other movers, Bayer gained 4% after winning a trial on Thursday over claims by three women that its Roundup weedkiller caused their cancer.
Investors also awaited third-quarter euro zone gross domestic product figures later in the day.
Reporting by Avinash P in Bengaluru; Editing by Subhranshu Sahu and Vijay Kishore
Source: Reuters