European Shares Rally as French Stocks Bounce Back Amid Oil Volatility

European markets opened higher on Monday after a sharp sell‑off in U.S. tech stocks late last week, with investors fretting over the funding prospects of AI‑driven firms. The benchmark Brent crude surged almost 5 % to $97.60 a barrel following an exchange of fire between Iran and Israel after an Israeli strike on Beirut. The price then eased to $94.60 a barrel when Iran announced a halt to military operations against Israel, after former U.S. President Donald Trump urged both sides to stop shooting.

In Asia, oil‑importing markets fell sharply. South Korea’s Kospi plunged nearly 9 % at one point, prompting a brief trading halt; Samsung Electronics and SK Hynix shares dropped 9 % and 6 % respectively. Japan’s Nikkei 225 slipped 3 %, while Hong Kong’s Hang Seng fell 1.5 %. In London, the FTSE 100 opened 0.4 % lower, with Rolls‑Royce and IAG among the biggest losers, whereas BP and Shell shares gained.

German, French and Spanish indices also fell before recovering some losses after the announcement of the cease‑fire. U.S. markets opened higher, with the S&P 500 gaining 1 % in early trade, led by chip stocks.

European AI‑heavy names were hit hard at the open: BE Semiconductor Industries fell 4.5 %, ASML 3.2 %, and the pan‑European Stoxx 600 was down 0.9 %. German tech firm Aixtron slid almost 6 %, and Finland’s Nokia fell 5 %. The week’s decline followed a steep sell‑off in tech shares at the end of last week, when the Nasdaq lost nearly 5 % and the S&P 500 fell 2 % on a weekly basis, ending nine consecutive weeks of gains.

Investors are increasingly uneasy about the valuation of AI stocks amid rising inflation and the prospect of higher interest rates. Susannah Streeter, chief investment strategist at Wealth Club, noted that markets are now pricing in a greater likelihood of a Federal Reserve rate hike this year, adding that the demand for fresh funding by tech giants remains high but is tempered by concerns over asset valuations.