STOXX 600 edges higher on technology boost; banking stocks cap gains

Tech stocks got a boost after wafer processing equipment supplier ASM International raised its second-quarter revenue forecast, citing upbeat Chinese demand and higher sales in advanced logic and memory. Shares of ASM International surged nearly 10% to top the Dutch index and were on track for their best day in eight months, if gains hold.

European shares rose on Wednesday as the technology sub-index got a boost after ASM International's strong forecast, although gains were limited by a drop in banking stocks following a disappointing earnings report from Swedish lender Handelsbanken.

The pan-continent STOXX 600 index edged 0.2% higher by 0845 GMT, hovering levels seen more than a week ago, with the technology sector gaining 2.3%. Tech stocks got a boost after wafer processing equipment supplier ASM International raised its second-quarter revenue forecast, citing upbeat Chinese demand and higher sales in advanced logic and memory.

Shares of ASM International surged nearly 10% to top the Dutch index and were on track for their best day in eight months, if gains hold. Keeping a lid on gains, the euro zone banking sector dropped 0.5%, bogged down by a 10% slump in Handelsbanken after the lender reported first-quarter net profit below market expectations due to rising expenses.

Kering fell 7.9%, bottoming France's CAC 40 index, after the luxury goods maker forecast a 40% to 45% plunge in first-half operating profit. Of the 34 STOXX 600 companies that have reported first-quarter earnings, 61.8% have exceeded analyst estimates, compared with a long-term average of 54%, according to LSEG data on Tuesday.

"I don't think that we are at a point where we're talking about an imminent credit crunch, but the tighter economic conditions are having an impact," said Anthi Tsouvali, multi-asset strategist at State Street. "But having said that, I don't think that we're here at a point where we should be overly concerned if the European Central Bank (ECB) does cut in the summer."

European stocks had a stellar run in the previous two quarters, before taking a pause in April as geopolitical tensions and concerns of a weak corporate reporting season overshadowed the optimism surrounding an imminent interest rate cut. Meanwhile, Bundesbank President Joachim Nagel said euro zone inflation could still prove stubborn so ECB rate cut in June will not necessarily be followed by further policy easing.

Weighing on Switzerland's market index, shares of Roche lost 2.7% after the drugmaker said its first-quarter sales slipped by 6% on the loss on COVID-related revenue. Volvo Car shed 6.1% after the Swedish automaker posted downbeat quarterly profit, citing lower revenue from contract manufacturing.

Melexis jumped 17.1% to top Belgium's main index after the country's largest semiconductor supplier forecast second-quarter sales above analyst estimates. Elsewhere, London's blue-chip FTSE 100 index outperformed the broader euro zone, adding 0.5% to mark a record peak of 8,083.92 points.

 

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)