Tech sector under pressure as Elice’s IPO flop in Seoul takes its toll

(Il Sole 24 Ore Radiocor) - Selling pressure is returning on European tech shares, with the Euro Stoxx benchmark index under pressure. Ahead of the quarterly results from the sector’s major players (IBM and Meta are due on Wednesday, with the sector’s other giants scheduled for next week), investor sentiment towards artificial intelligence-related investments remains volatile. One example among many is what happened in Asia, where the share price of Elice, a South Korean data centre infrastructure company, fared poorly, with the share closing down 32.04 per cent. All this is also having an impact on the European and Italia sectors.

On the Milan Stock Exchange (FTSE MIB -0.9%), Technoprobe (-4.6%), Prysmian (-4%) and ST (-3.45%) slipped to the bottom of the list. It was the same story across the rest of Europe. In Amsterdam (AEX -0.9%), ASML fell by 3.56 per cent, ASM International by 3.66 per cent and BE Semiconductor by 3.39 per cent. Things are no better in Germany (DAX -0.96%), where Aixtron is down 4.38% and Infineon 3.37%.

As the experts at Moneyfarm point out, the focus “is on the sustainability of AI investments and their ability to deliver the expected results”, which is why sales are concentrating primarily on AI-related securities. ‘In recent trading sessions, amongst US and European sectors, only technology and certain US industrial sectors have recorded negative performance, whilst most other sectors have held up well. Given the significant weighting of technology in global indices, this divergence between sectors is particularly noteworthy and suggests that the recent corrections do not necessarily reflect a generalised deterioration in the equity market. The high volatility seen in South Korea also confirms the extent to which the AI theme continues to influence investor sentiment. Whilst maintaining a positive outlook on the long-term prospects for artificial intelligence and technology investments, we therefore believe it is important to maintain a diversified exposure. In this context, our positions in Europe and the UK have held up well.