Europe's STOXX 600 hovers near all-time high; tech lags

European Stocks Rally: STOXX 600 Nears Record, Mining Gains, Tech Stocks Lag

European Markets Overview and Sector Performance

By Johann M Cherian

Nov 5 (Reuters) - Strong mining gains led European shares higher on Thursday, with the benchmark just shy of hitting a record high, while technology shares lagged as investors weighed the implications of a Democratic sweep in the US midterm elections.

STOXX 600 and Regional Index Movements

The pan-European STOXX 600 index rose 0.7% to 661.99 points by 0905 GMT. All major regional benchmarks were also higher, led by a 1.7% gain in Spain's IBEX.  

Mining and Basic Resources Surge

Basic resources rose 2%, boosted by ArcelorMittal's 5% gain after the world's second-largest steel maker topped core profit expectations. 

Political Developments Impacting Markets

Investors were broadly relieved by a Democratic win in both houses of Congress in the US and that President Donald Trump acknowledged defeat.

Further, expectations were high that efforts to end the Iran conflict could be accelerated, while the Democrats could keep a check on excessive fiscal spending and policies targeting sectors such as European banks and clean energy.    

Technology Sector Under Pressure

Concerns Over AI and Data Center Regulation

However, uncertainty prevailed over the outlook for the global technology sector on concerns that increased scrutiny over data centre buildout could slow down spending on developing AI, although analysts highlighted that existing orders are unlikely to be affected.

Expert Insight

"Concerns about a potential tightening of artificial intelligence regulations have not disappeared, but they appear to be offset for now by robust investment in data centers and resilient corporate earnings," said John Plassard, head of investment strategy at Cité Gestion, in a note.

Tech Stock Performance

Chip stocks including Siltronic shed 7.3%, while chip equipment maker ASML lost 2.4% and Soitec was off 4.8%.

Asian tech stocks witnessed steep declines and US Nasdaq futures shed 0.7%.   

Positive Moves in Software and Data Center Stocks

France's Legrand gained 5.5% after raising its 2026 sales growth forecast for the second time this year on robust data centre demand.

Software stocks, which have had the overhang of AI disruption concerns this year, were also marginally higher. SAP and Dassault Systemes were up over 1% each.

Corporate Earnings Highlights

Thursday also brought a wave of corporate earnings. 

Major Gainers and Losers

Rheinmetall slid 16.5% after cutting its 2026 sales forecast for the second time in three months. Renewables such as Orsted and Nordex rose 4.2% and 4%, respectively, after they reported strong results. 

Air France-KLM gained over 11% after exceeding third-quarter operating profit expectations.

Aker BP shed 11.2% after the UK's BP said it sold a 5% stake in the Norwegian oil and gas company.

Upcoming Events

Later in the day, investors will be keen on interest rate decisions out of the UK.

(Reporting by Johann M Cherian in Bengaluru; Editing by Harikrishnan Nair and Janane Venkatraman)