Europe stocks close lower; Tech stocks down 4.4% as ASML falls 11%; Traders slash BOE rate cut bets after UK inflation

LONDON — European stocks closed lower Wednesday, continuing negative sentiment seen in the previous two trading sessions as technology stocks plummeted.

The regional Stoxx 600 index provisionally closed 0.43% lower, with most major bourses in the region falling and sectors trading mixed.

European tech stocks plunged 4.4%, mirroring a sell-off seen across the Atlantic, where the Nasdaq Composite retreated 2% in early deals. U.S. stocks were broadly lower as investors continued to rotate out of megacap tech stocks into the broader market.

Shares in Dutch semiconductor firm ASML meanwhile tumbled 10.9%, as its second-quarter earnings beat was offset by a global drag on chip stocks from reports of tighter export restrictions from the U.S.

U.K. inflation came in at 2% on an annual basis in June, according to data released by the Office for National Statistics on Wednesday. This was slightly higher than the forecast 1.9%, but in line with May’s 2% reading and the Bank of England’s target rate.

Following the print, the British pound broke above the $1.3 level against the U.S. dollar for the first time in a year. Markets reduced bets on an August rate cut from the Bank of England to around 35% from 50% due to the stickiness of services inflation.

Analysts are also expecting a period of growth-friendly policies and political stability in the U.K. under the newly elected Labour government.

Asia-Pacific markets traded mixed on Wednesday, with Australia’s S&P/ASX 200 reaching an all-time high.