Tech rebound lifts European stocks, chipmakers jump – Metro US

Tech rebound lifts European stocks, chipmakers jump

German share price index DAX graph is pictured at the
German share price index DAX graph is pictured at the stock exchange in Frankfurt

By Sruthi Shankar

(Reuters) -European stocks rose on Wednesday after one of the worst market routs this year, with investors picking up beaten-down shares of technology sector, while chip equipment maker ASML gained on upbeat earnings forecast.

The pan-European STOXX 600 index rose 1% after shedding 2.2% in the previous session in their biggest percentage daily decline since mid-July.

Global stocks tumbled on Tuesday as U.S. government bond yields surged on growing expectations of faster interest rate hikes by the Federal Reserve and steered investors away from high-growth technology stocks.

European tech sector was up 1.5% after losing 4.8% on Tuesday. ASML Holding NV, one of the key suppliers to computer chip makers, rose 1.8% after raising financial targets.

ASM International jumped almost 6% a day after it raised its third-quarter order intake guidance.

After smooth gains in the past seven months, stock markets have faced volatility in September with investors nervous about major central banks withdrawing 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.

“Rates are still low in a historical context, but a sharp sustained increase will unnerve markets if the economy is caught short of time to adapt to tighter credit conditions,” said Jim Smigiel, chief investment officer at SEI.

A recent surge 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 surged to a 13-year-high in September. The monthly reading of euro zone’s consumer confidence is due at 0900 GMT.

Among other individual stocks, British drugmaker AstraZeneca gained 2.3% after saying it will take full control of Caelum Biosciences in a deal worth up to $500 million.

British clothing retailer Next climbed 2.5% to a record high after it raised its full-year profit outlook for the fourth time in six months.

Meanwhile, the oil & gas index slipped back from over one-year highs as a recent rally in crude prices petered out following an unexpected build in U.S. inventories. [O/R]

Royal Mail Plc dropped 4.9% to the bottom of UK’s FTSE 100 after UBS downgraded the stock to “sell” from “buy”.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)

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