European stocks fell after erasing earlier gains late in the trading session, tracking losses in US peers, with noticeable sector rotation.
The Stoxx Europe 600 Index retreated 0.5% by the close after gaining as much as 0.9%. There was profit taking on this year’s winning thematics such as energy, mining, telecoms and technology stocks. By contrast, chemicals, food and retail stocks outperformed.
In the telecom sector, Ericsson AB and Nokia Oyj tumbled 6.3% and 7%, respectively, on reports of possible competition from Nvidia Corp. on telecom chips.
In other stock moves, Unipol Assicurazioni SpA shares advanced 4.7% on expectations the insurer would acquire the Banca Monte dei Paschi di Siena SpA brand and certain assets if Intesa Sanpaolo SpA’s offer for the lender is successful. A day before Intesa’s offer, Banco BPM SpA already pitched a merger of equals with Paschi, without giving a price.
Paschi gained 2.6% on Tuesday, with Intesa up 0.9% and Banco BPM rising 1.5%.
Read more: Intesa’s Messina Braces for Bidding War Over Monte Paschi
The healthcare sector was also in focus. GSK Plc retreated 0.5% after the pharmaceutical firm agreed to buy Nuvalent Inc. in a deal valued at $10.6 billion. AstraZeneca Plc fell 1.2% after its experimental obesity pill delivered 11.8% weight loss in a mid-stage trial.
The Middle East conflict remains top of mind, with Brent crude falling to about $90 a barrel after US President Donald Trump renewed his claims of momentum toward ending the war with Iran. Any progress in negotiations will be a positive for Europe ahead of the European Central Bank meeting on Thursday, where policy makers are expected to hike interest rates.
“European equity markets benefit from improving risk sentiment globally in addition to M&A talk in the Italian banking sector,” said Wolf Von Rotberg, equity strategist at Bank J Safra Sarasin. “This comes after a period of sustained underperformance in financials over recent months.”
For more on equity markets:
- Shaky Market Just Looks Like a ‘Healthy Reset’: Taking Stock
- M&A Watch Europe: GSK to Buy Nuvalent; Nestle, Monte Paschi
- Europe’s Next IPOs Will Add to the 2026 Defense Focus: ECM Watch
- US Stock Futures Fall; Mission Produce, Vail Resorts, Apple Fall
- Sweet Deal: The London Rush
You want more news on this market? Click here for a curated First Word channel of actionable news from Bloomberg and select sources. It can be customized to your preferences by clicking into Actions on the toolbar or hitting the HELP key for assistance. To subscribe to a daily list of European analyst rating changes, click here.