A look at the day ahead in European and global markets from

Ankur Banerjee

European chip and luxury stocks will be at the forefront of

investors' minds on Wednesday, and for all the wrong reasons,

after lacklustre earnings from the region's biggest tech firm

ASML and luxury bellwether LVMH dragged shares lower.

Chip stocks around the world sank after ASML

forecast weak 2025 sales and said that, while AI-related chips

are booming, other parts of the semiconductor market are not,

which the Dutch firm said is making many of its chipmaker

customers cautious.

ASML is the world's biggest manufacturer of chipmaking

equipment, with customers including AI chipmaker TSMC,

logic chipmakers Intel ( INTC ) and Samsung, and

memory chip specialists Micron and SK Hynix ( HXSCF ).

Little wonder, then, that its dour outlook triggered a

succession of chip stock sell-offs in Europe, the U.S. and Asia.

The European tech stocks index sank 6.5% on Tuesday, its

biggest one-day drop in four years.

Stocks on Wednesday may stabilise, but expect sentiment to

be weak through the day.

Investors will also watch for how luxury stocks

react after LVMH reported a decline in quarterly sales

for the first time since the pandemic, as consumer demand in

China weakened.

That has added to investors' wall of worries over a sector

that is heavily dependent on China, and taken the steam out of a

recent rally in luxury stocks that followed news on Chinese

stimulus measures.

Chinese consumer confidence has slumped back to the all-time

lows of the COVID-19 era, LVMH Chief Financial Officer

Jean-Jacques Guiony said.

Scepticism had already been building among investors over

whether China would follow through with extensive details and

strong fiscal stimulus measures to revive the sputtering

economy.

China was also a theme for ASML, which got 47% of its total

revenue in the latest quarter from China but expects that

contribution to come down to 20% in 2025.

Investors will be eyeing a Beijing press conference (yes,

another one) on Thursday, this time to discuss promoting the

"steady and healthy" development of the property sector.

On the macro side, UK September inflation data is due later

in the day and will help to chart the Bank of England's likely

path at next month's policy meeting, with markets leaning

towards a rate cut.

Data on Tuesday showed that British pay grew at its slowest

pace in more than two years in the three months to August and

that job vacancies fell again, keeping a rate cut from the

central bank on track.

Key developments that could influence markets on Wednesday:

Economic events: UK September CPI and PPI