Tech sector pushes European stocks higher
On Wednesday European stocks gained ground after one of the worst market slides this year, with investors picking up beaten-down shares of technology sector, while chip equipment maker ASML gained on positive earnings forecast.
The pan-European STOXX 600 index gained 1% after falling 2.2% in the previous session in their biggest percentage daily fall since mid-July.
Global stocks were negative on Tuesday as U.S. government bond yields increased on rising expectations of faster interest rate climbs by the Federal Reserve and pushed investors away from high-growth technology stocks.
European tech sector rose by 1.5% after dropping 4.8% on Tuesday. ASML Holding NV, one of the key suppliers to computer chip makers, gained 1.8% after increasing financial targets. ASM International rose almost 6% a day after it increased its thirdquarter order intake guidance.
After steady gains in the past seven months, stock markets have faced volatility in September with investors anxious about major central banks retreating pandemic-era stimulus amid signs of higher inflation.
The benchmark STOXX 600 is on course to end September almost 3% lower, leaving it with marginal gains on the quarter.
A recent rise in commodity prices, supply-chain constraints, the Evergrande debt crisis and a power crunch in China have all hurt global growth sentiment. Data showed Spain’s inflation rose to a 13-year-high in September.
Among other individual stocks, British drugmaker AstraZeneca rose 2.3% after saying it will take full control of Caelum Biosciences in a deal worth up to $500 million. British clothing retailer Next gained 2.5% to a record high after it increased its full-year profit outlook for the fourth time in six months. Royal Mail Plc fell 4.9% to the bottom of UK’s FTSE 100 after UBS downgraded the stock to “sell” from “buy”.
Meanwhile, the oil & gas index dropped from over one-year highs as a recent rally in crude prices levelled out following an unexpected build in U.S. inventories.