Eurozone Stock Markets Suffer Amid SAP Probe and Economic Slowdown

European shares fell as SAP faced a widened U.S. investigation and Euro zone business activity contracted. STOXX 600 dropped 0.8%, led by losses in the automobile sector. The decline raised expectations for interest rate cuts by the European Central Bank, with inflation trends further supporting this outlook.

European shares experienced a downturn following reports of an extended investigation into German tech giant SAP by U.S. authorities, combined with tepid economic data from the Eurozone. The pan-European STOXX 600 index declined by 0.8%.

The automotive sector faced significant pressure, registering a 2.1% drop—the lowest in almost a year—following a downgrade of Stellantis by Barclays. SAP's shares fell by 1.5%, contributing to an overall dip in technology stocks.

Amid declining business activities and potential interest rate cuts by the ECB, markets reflected a cautious outlook. Notable decreases were seen in Germany's DAX and France's CAC 40. In the UK, the FTSE displayed minimal movement despite earlier gains following Bank of England projections on interest rate adjustments.

(With inputs from agencies.)