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NOT AS LOW AS FEARED

European markets are lower - but the declines are not as steep as futures suggested they could be.

The cross-regional STOXX 600 is down 0.71%, with the majority of sectors in the red as investors navigate flaring tensions in the Middle East and a global tech stock pullback.

Construction and materials .SXOP shares were down 1.8%, leading declines, while oil and gas stocks rose 0.8%. A basket of European tech stocks .SX8P meanwhile was around 0.7% lower.

It's not exactly a pretty picture, but just as the AI-fuelled rally did not carry European shares higher in the way it did some indexes in the U.S. and Asia the tech rout now also doesn't seem to be applying quite the same downward pressure.

That makes sense given tech and AI-related stocks make up a smaller proportion of broad European indexes.

The DAX .GDAXI and CAC .FCHI are 0.9% and 0.8% lower respectively, while the FTSE 100 .FTSE is down 0.3%.

Tate and Lyle TATE.L shares were up 12.5% after the company agreed to a takeover offer from U.S. rival Ingredion, while Zealand Pharma shares ZELA.CO tumbled 25.8% after trial data showed its obesity drug survodutide had worse side effects and higher patient dropout rates than rival treatments.

Elsewhere, shares in Italian lender Monte dei Paschi di Siena BMPS.MI rose 11.3% after Italy's biggest banking group Intesa Sanpaolo ISP.MI on Monday announced a €30.6 billion ($35 billion) unsolicited cash-and-share bid to buy the rival lender.

(Sophie Kiderlin)

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EARLIER ON LIVE MARKETS:

EUROPE BEFORE THE BELL: FUTURES SHARPLY LOWER CLICK HERE

BLISTERING AI RALLY TURNS UGLY CLICK HERE