European shares traded slightly lower on Thursday as investors weighed corporate earnings, merger and acquisition announcements, and mounting geopolitical tensions in the Middle East. The pan-European STOXX 600 index slipped 0.1% to 641.95. Technology stocks showed a mixed performance, with ASML gaining around 2% while STMicroelectronics edged lower. Sentiment in the semiconductor space was boosted by Taiwan Semiconductor Manufacturing Co. (TSMC) posting a record 77% jump in second-quarter profit.

ABB declined 1% after announcing a $5.5 billion acquisition of UK-based automation company Rotork, though ABB's second-quarter operating profit exceeded expectations. Rotork shares surged 66% following the takeover announcement. Separately, Delivery Hero slipped 1% after Uber launched a public takeover offer valuing the food delivery company at about $14.8 billion.

Investor sentiment remained fragile as renewed U.S. and Iranian military strikes heightened concerns over broader conflict in the Middle East, keeping Brent crude prices near $85 a barrel and raising fears of higher energy costs and inflation. The cautious tone reflected concerns that geopolitical risks and elevated oil prices could weigh on economic growth and corporate margins, despite resilient earnings and deal-making.