Global Market: European shares fall as tech selloff, Middle East tensions weigh; Saab gains

European shares opened lower on Friday and were on track to post weekly losses as escalating tensions in the Middle East and a broad selloff in global technology stocks dampened investor sentiment.

The pan-European STOXX 600 index was down 0.6% at 639.94 points by 0707 GMT, with weakness across most major sectors.

According to Reuters, the benchmark index was headed for a modest weekly decline as investors continued to rotate out of semiconductor stocks amid concerns over stretched valuations following a strong rally earlier this year.

Technology stocks led the declines in Europe, with the sector dropping 2.3%. French chip materials supplier Soitec fell 3.6%, while semiconductor equipment makers ASMI and ASML each declined more than 4%.

The weakness came despite upbeat forecasts from major industry players this week, including Dutch chip equipment maker ASML and Taiwan Semiconductor Manufacturing Co. (TSMC). The optimistic outlooks failed to prevent selling pressure in technology stocks across Asian, U.S. and European markets.

Investors have increasingly shifted focus toward sectors that have lagged for much of the year. Luxury stocks emerged as one of the strongest-performing groups on the STOXX 600 this week, rising about 3%.

British luxury brand Burberry said its recovery continued during the April-June quarter, supported by robust demand in the United States and China. However, the company said that the conflict in the Middle East had weighed on tourist spending in Europe. Burberry shares fell 1.7%.

Among individual movers, Swedish defence and aerospace company Saab climbed 3.4% after reporting a stronger-than-expected rise in second-quarter operating profit. Reuters attributed the earnings growth to solid demand across the company's key markets, which also drove higher sales and order intake.

Meanwhile, geopolitical tensions remained in focus after Iran said it had launched fresh attacks on U.S. facilities in the Gulf, a development that pushed oil prices higher and added to concerns over the global economic outlook.