European stocks stable in short week
On Tuesday a sharp drop in shares of Apple-supplier Dialog Semiconductor dominated trading in otherwise muted European stock markets as a holiday-shortened week and broadly risk-off sentiment kept investors from making big bets.
The pan-European STOXX 600 was little changed as gains in the luxury goods sectors offset weakness in chipmakers and financials. Better-than-expected quarterly sales at LVMH lifted shares of the world’s largest luxury goods maker to a record high.
European shares have been treading water in recent sessions, with the benchmark index little changed so far this month on mounting political tensions in the Middle East and North Korea, above-average valuations and caution ahead of earnings season.
Expectations that European stocks might see bigger swings in the short term rose to their highest since end-February, following a similar spike in volatility on Wall Street overnight.
On the day, tech stocks were the worst sectoral performers, with a sub-index tracking top European tech firms down 1 percent. Losses were led by Dialog Semiconductor, which lost nearly a quarter of its market value after a German broker said the company risks losing business from Apple.
More than 4.4 million Dialog shares had changed hands by mid-morning making them the busiest traded stock by far on the STOXX 600.
Banking stocks dropped 0.5 percent, with Banco Popular the biggest loser, down 4 percent and hitting fresh record lows. On Monday, the bank said that it was considering another capital hike to clean up its balance sheet and would consider a merger deal.
Japan’s Nikkei share average fell on Tuesday, as rising geopolitical tensions over North Korea, a stronger yen and renewed uncertainty in the French presidential election hurt investor sentiment. The Nikkei dropped 0.3 percent, while the broader Topix shed 0.3 percent, though trading was slow with the turnover at the Tokyo Stock Exchange’s main board hitting its lowest in almost a month.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.