(Bloomberg) — European stocks erased gains with banking stocks sliding the most, while investors awaited Nvidia Corp.’s earnings for clues on the outlook for artificial intelligence.
The Stoxx Europe 600 Index was little changed at 9:47 a.m. in London after earlier gaining as much as 0.4%. The banks subindex dropped 1.3%, as a Bloomberg News report said the Italian government was seeking to tap lenders’ profits again as a way to prop up public finances.
Italian banks Banca Monte dei Paschi di Siena SpA, BPER Banca SpA and Intesa Sanpaolo SpA were among the biggest decliners. Shares of Deutsche Bank AG and Commerzbank AG also dropped after both lenders were downgraded by Goldman Sachs Group Inc. analysts following significant outperformance this year.
European stocks have stumbled this week as French Prime Minister Francois Bayrou shocked markets on Monday by calling for a confidence vote. The benchmark has retreated after briefly topping a March record high on Friday.
All eyes Wednesday are on Nvidia’s quarterly earnings due after the US market close, for signs on whether demand for AI remains healthy. In Europe, technology stocks have missed out on the big tech rally across the Atlantic as profit expectations at home remain subdued.
“Nvidia results will be decisive for European markets in the short term,” said David Kruk, head of trading at La Financiere de l’Echiquier. He also warned of lingering uncertainty from the events in France. “For me, the French situation isn’t a game changer for the European rally overall, it might actually encourage some dip buying,” Kruk added.
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–With assistance from Allegra Catelli.
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