Chipmakers buoy European shares after two-day selloff

FRANKFURT: European stocks steadied on Thursday after their worst two-day selloff since March as investors balanced concerns over the U.S. debt ceiling standoff and global economic slowdown with optimism from upbeat corporate earnings.

The pan-European STOXX 600 index (.STOXX) was flat by 0707 GMT after shedding about 2.5% in the past two days, triggered by a selloff in luxury stocks and little progress in talks to raise the U.S. debt ceiling and avert a default.

Ratings agency Fitch put the United States' credit on watch for a possible downgrade on Wednesday.

European chipmakers gained on Thursday after the world's most valuable chipmaker Nvidia Corp (NVDA.O) forecast quarterly revenue more than 50% above Wall Street estimates.

Shares of BE Semiconductor (.BESI.AS) jumped 6.5% and ASM International (ASMI.AS) rose 6.3%. The wider tech index (.SX8P) rallied 1.7%.

Germany's DAX (.DAX) slipped after data showed the German economy contracted in the first quarter of 2023, compared with the previous three months, thereby signalling a recession.