European shares fell on Thursday as investors assessed new corporate earnings and mergers and acquisitions deals, amid escalating tensions in the Middle East that threaten to fuel inflation from rising energy prices.
The pan-European STOXX 600 index fell 0.4% to 640.17 points, with most sectors trading slightly lower.
The performance of technology sector stocks was mixed, with shares of ASML, a chip-making equipment company, rising 2% at the start of trading, while shares of most other semiconductor companies, including STMicroelectronics and BE Semiconductor, declined.
Global markets were relieved after Taiwan's TSMC, the world's largest producer of advanced chips used in artificial intelligence applications, announced a record 77% jump in second-quarter profits, indicating continued strong demand for AI infrastructure.
The markets also received a boost from French company Publicis, whose shares rose 1.4% after it announced an increase in its net revenues in the first half of the year, driven by strong demand for AI-based marketing services.
In other news, ABB shares fell 1% after the industrial group announced its acquisition of automation company Rotork for $5.5 billion, despite reporting better-than-expected operating profits for the second quarter. Conversely, Rotork's UK shares surged 66%.
Uber also announced a public takeover bid for Delivery Hero, a deal that values the German food delivery company at approximately $14.8 billion. Delivery Hero's stock fell 1% after a rally earlier in the year following reports of the offer.
Global investor sentiment remained cautious after new US and Iranian military strikes raised fears of a wider conflict in the region, as Brent crude traded near $85 a barrel.
