Tech, telecom stocks lead declines
German business morale brightens further in Jan
Rheinmetall hits record high

Jan 25 Reuters European stocks slipped on Wednesday as lacklustre results from U.S. software giant Microsoft weighed on the broader technology sector, while signs of improving economic outlook in the euro zone fed into worries about further interest rate hikes.

The panEuropean STOXX 600 fell 0.3, heading lower for a second day with technology and telecom declining the most.

Futures signalled a weak open for Wall Street as Microsoft Corp slipped 1.6 in premarket trading after the company warned it could miss expectations on cloud earnings in the current quarter.

The weak outlook painted by Microsoft is weighing on the wider tech sector, said Michael Hewson, chief markets analyst at CMC Markets in London.

ASML Holding NV slipped nearly 1 from ninemonth highs scaled in the previous session. The Dutch chip equipment maker on Wednesday forecast sales growth of more than 25 for 2023.

European stocks came under pressure on Tuesday, as an improvement in economic activity spurred speculation that the European Central Bank ECB might have more room to raise interest rates to tackle inflation.

Economists at Deutsche Bank no longer expect a euro zone recession in 2023 and also lowered their inflation outlook, but don39;t see the ECB taking their foot off the hawkish pedal just yet.

German business morale brightened in January as Europe39;s largest economy…