July 17 (Reuters) – European shares opened lower on Friday and were set for weekly losses as global sentiment was dampened by escalating tensions in the Middle East and a selloff in global technology stocks.
The pan-European STOXX 600 index was down 0.6% at 639.94 points by 0707 GMT.
The benchmark index is set for a small weekly loss as investors rotated out of semiconductor shares on concerns about elevated valuations following a rally earlier this year.
Strong forecasts from industry leaders such as chip equipment maker ASML and Taiwan’s TSMC this week did little to limit the weakness in Asian and Wall Street tech stocks.
Europe’s tech sector shed 2.3% and led sectoral declines, with Soitec falling 3.6% and ASMI and ASML dropping over 4% each.
Markets are now looking at sectors that have underperformed for much of the year, such as luxury, which has led gains on the STOXX index and is up about 3% this week.
Britain’s Burberry said that its recovery continued in the April-June quarter, aided by strong sales in the United States and China. However, shares slipped 1.7% after the luxury group said the Middle East conflict weighed on tourist spending in Europe.
Saab rose 3.4% after the Swedish defence and aerospace group reported a bigger-than-expected increase in second-quarter operating profit, as strong demand across its key markets boosted sales and order intake.
Meanwhile, Iran said it launched fresh attacks on U.S. facilities in the Gulf, lifting oil prices further.
(Reporting by Tharuniyaa Lakshmi and Johann M Cherian in Benglauru; Editing by Sonia Cheema)
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