European stocks slip as Microsoft’s lacklustre results weigh on tech sector

Investors remained cautious amid uncertainty about further interest rate movements

European stocks slipped on Wednesday as lacklustre results from US software giant Microsoft fanned fears about the outlook for the tech sector, while investors remained concerned that central banks were not yet close to pausing their interest rate hikes.

Technology shares, which have rebounded this year after a rough 2022, fell 0.4 per cent as Microsoft forecast current-quarter cloud business revenue below estimates.


The Iseq edged up 0.13 per cent, finishing the positive side of flat as the major European indices slipped fractionally into the red.

Ryanair added 2.3 per cent on a relatively upbeat day for several airline stocks as rival Easyjet reported record bookings despite the cost-of-living crisis. The Irish airline closed at a price of €15.50 on its Dublin market listing.


Index heavyweight CRH was another climber, finishing 0.65 per cent higher at €41.72, while Bank of Ireland rose 0.9 per cent to €9.55. But packaging group Smurfit Kappa fell 1.1 per cent to €39.06 and Paddy Power-owner Flutter Entertainment dropped almost 1 per cent to €145.35.


The blue-chip FTSE 100 eased 0.2 per cent to a two-week low and the midcap FTSE 250 index fell 0.3 per cent. Pessimism spilt over from Wall Street after Microsoft warned that growth in its lucrative cloud business could stall, hitting tech stocks globally.

Events and analytics firm Ascential bucked the broader trend, jumping 26 per cent for its best day in more than two years after forecasting full-year earnings at the top end of market expectations.

EasyJet soared 9.7 per cent to mark its biggest one day percentage gain since March 2022, as the airline indicated it expected to beat market expectations for 2023 on strong bookings into summer. Aer Lingus-parent IAG rose 2 per cent to its highest since February 2022.

Aviva gained 3.3 per cent after the insurer maintained its dividend guidance and capital returns outlook, while pub operator J D Wetherspoon dropped 6.1 per cent after saying it was “cautiously optimistic” about this financial year.


The pan-European Stoxx 600 fell for a second day, closing down 0.3 per cent but off a near two-week low hit earlier in the session. The Dax nudged down 0.1 per cent despite a brightening in German business morale in January, as Europe’s largest economy started the new year with easing inflation and an improved outlook, the Ifo institute’s survey showed.

Corporate results from some European companies such as semiconductor firm ASML Holding offered some reasons for optimism about the region’s corporate health.

Shares of Lonza jumped 7.5 per cent as the Swiss drug contract manufacturer said it will buy back shares worth 2 billion Swiss francs ($2.17bn).

But Netcompany Group tumbled 21.2 per cent after the Danish IT services provider’s earnings outlook missed analysts’ expectations.


Wall Street’s main indexes dropped in early trading, with the Nasdaq down 2 per cent as Microsoft’s outlook weighed down technology stocks, while a bleak quarterly report from Boeing added to fears of a recession.

Shares of Microsoft fell 3.9 per cent after it warned that growth in its lucrative cloud business could stall, while its PC unit continued to struggle. The S&P 500 technology index shed 2.1 per cent to lead declines among the 11 major sector indexes., Salesforce and ServiceNow, which have substantial cloud businesses, fell between 2.5 per cent and 4.5 per cent.

Other major growth stocks, including Apple, Alphabet and Tesla, also dropped between 1.5 per cent and 3 per cent.

Boeing slipped 1.3 per cent as its losses widened in 2022 and it missed fourth-quarter revenue estimates.

News Corp jumped 8 per cent, leading gains on the S&P 500, after Rupert Murdoch withdrew a proposal to reunite News Corp and Fox. – Additional reporting: Reuters

Laura Slattery

Laura Slattery

Laura Slattery is an Irish Times journalist writing about media, advertising and other business topics