[MARKET ANALYSIS] European bourses suffer from the risk tone in Asia, as Tesla's cut in spending plans reignite AI worries

• European bourses are under pressure this morning, following on from the weakness seen in Asia. In Hong Kong, the likes of Alibaba (-6.1%) and PDD (-3.6%) slipped after China’s CMRC urged e-commerce platforms to strengthen product quality controls and consumer protection. Over in South Korea, continued worries over the AI trade showed. Analysts point to Tesla (-4.8% pre-market) earnings as the source of the day’s weakness, as it pulls back its spending plans, whilst downside in Lam Research (-8.8% pre-market) also failed to help sentiment.
• Sectors highlight the negative bias. Telecoms, Food, Beverages & Tobacco and Health Care are the sector gainers. The underperformer is Basic Resources, followed by Banks and Tech.
• Key earnings include: SAP -0.9%, despite Q3 metric beats and sees FY26 cloud revenue at the upper end of its guided range; Nestle +1.4%, Q3 sales beat and reaffirms its FY26 sales growth target; Roche -0.5%, despite Q3 sales topping estimates and reaffirms FY outlook; Nokia -2.3%, despite Q3 profit beating expectations and expects supply chain constraints to continue in 2027.
• US equity futures follow the broader space lower, with underperformance in the NQ. Although Tesla is seemingly weighing on the equity space, Meta (-1.1% pre-market) did post upbeat earnings. Q3 revenue beat expectations and Q4 guidance was stronger than forecast, supported by continued AI momentum.

Sessions where a high-multiple growth name signals capex restraint have a familiar shape: the read-through runs from the single stock into the AI capex complex as a whole, since hyperscaler and corporate AI spending is the load-bearing assumption behind semiconductor equipment and memory valuations, and it is the growth factor rather than the broad index that takes the strain. The pattern here fits, with the Nasdaq future underperforming and the Korean and Asian tech leg leading Europe lower, while defensives (telecoms, food, health care) top the sector board, the classic rotation signature of an AI-sentiment session rather than a macro one. The counter-signal worth noting is that the capex pullback is company-specific, not demand-side: Meta beating on revenue and guiding up on AI momentum sits awkwardly against a demand-destruction narrative, which historically is the setup for shallow, rotation-driven sessions rather than trend breaks. The separate China thread, regulatory pressure on the e-commerce platforms, is a different mechanism entirely, idiosyncratic to the Hong Kong complex rather than part of the AI channel. The tell in coming sessions is whether the equipment and semicap complex stabilises on the Meta print, which would mark this as single-stock digestion, or whether further AI-adjacent names cut spending plans, which is how sentiment resets of this kind have broadened in the past.