Europe open: Stoxx dips below 500 as Nvidia disappoints

European shares opened lower on Thursday, with the benchmark Stoxx 600 index tipping below 500, as investors digested earnings from tech darling Nvidia overnight and developments in Ukraine.

The Stoxx fell 0.3% to 499 in early deals. After much hype and ceremony Nvidia third-quarter results smashed estimates, but a fall in margins popped the party balloon and investors marked the stock lower.

“At face value, Nvidia has once again generated the kind of growth that most companies will never achieve in their lifespan. What’s troubled investors this time was a quarter-on-quarter decline in gross margins, with guidance for them to fall further in the coming quarter, and weaker than expected forward guidance for revenue,” said AJ Bell investment analyst Dan Coatsworth.

“The negative market reaction suggests investors are now focusing on the minutiae rather than the big picture. That’s a natural evolution as the more people zoom in on a company, the more they learn about it, and the more granular detail they want.”

Eyes were also on Ukraine as the conflict escalated militarily and politically after the UK also allowed the Kyiv to use its storm shadow long-range missiles on targets inside Russia, following a similar US decision earlier in the week.

Meanwhile on Thursday Ukraine claimed Russia overnight launched an intercontinental ballistic missile for first time during the war. The country's air force said the launch took place from the Astrakhan region of the Russian Federation, an area to the south-east of Vologograd, which borders on the Caspian Sea.

In economic news, the UK government borrowed more than expected last month as tax receipts failed to keep up with expenditure and debt repayments.

Government borrowing surged to £17.4bn, up £1.6bn year on year, in the first figures published since Finance Minister Rachel Reeves’s Budget last month. Economists had been expecting around £12.3bn.

It is also the second highest October borrowing since monthly records started in 1993.

In equity news, shares in JD Sports Fashion slumped as the sportswear retailer said full-year profit would be at the lower end of expectations after volatile trading in October.

Safety equipment and hazard detection products group Halma jumped as the company raised its interim dividend by 7% after a record first-half performance which saw sales top the £1bn mark, as it retained its guidance for the full year.

Novartis raised its medium-term sales guidance to 6% annual growth to 2028, driven by strong product momentum.

Soitec jumped 14%, after the French semiconductor materials supplier's half-year results, while CTS Eventim fell 8% after the German ticketing group's nine-month results.

Reporting by Frank Prenesti for Sharecast.com