Europe: Stoxx 600 ends marginally higher on tech boost
EUROPEAN shares ended a touch higher on Tuesday as a rally in technology-related shares following robust earnings from SAP helped offset declining resource-linked stocks that tracked lower commodity prices.
The pan-European Stoxx 600 index closed 0.1 per cent higher after posting its best day in more than a month on Monday.
Earnings updates from technology-related companies helped lift the index, with SAP jumping 7.2 per cent to an all-time high after Europe’s largest software maker reported better-than-expected quarterly operating income, buoyed by revenue growth and intensified cost-cutting.
The German benchmark index DAX gained 0.8 per cent, outperforming the region’s bourses on the back of SAP’s gains.
The technology sub-index outpaced the major Stoxx indexes and gained 1.4 per cent, with other chip stocks like ASML, ASMI and BESI also advancing between 1.2 per cent and 4.2 per cent.
Other prominent earnings included British caterer Compass Group, which gained 4.5 per cent after raising its annual profit and revenue forecasts for the second time this year.
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Second quarter earnings for Stoxx 600 companies are expected to decline 0.8 per cent versus a year prior, as per LSEG I/B/E/S data.
European shares have clawed back some of the losses seen last week on the back of a rebound in technology shares, while markets assess political developments in the United States and shift their focus to the earnings season.
“In the limited number of swing state polls including (Kamala) Harris, her performance in July has been generally on par with (Joe) Biden, which helps explain the rather modest reaction in the markets, but also leaves her firmly behind (Donald) Trump,” noted analysts at Danske Bank.
On the downside, Norsk Hydro’s shares were down 4.7 per cent after the aluminum producer posted an 18 per cent fall in second-quarter core profit, dragging the mining index down 1.7 per cent.
Slipping base metal prices also added to the woes of the index, while heavyweight energy shares lost 1 per cent as crude oil prices came under pressure.
Edenred slumped 13.5 per cent and was the top loser on the Stoxx 600 after the French vouchers and benefit cards provider’s quarterly revenue growth fell below 20 per cent for the first time since the end of 2022.
Europe’s largest defence electronics company Thales slipped 6.7 per cent amid margin worries in its space business despite beating market expectations for fresh orders.
Porsche AG dropped 5.1 per cent after the German carmaker cut its annual sales and profit forecast due to a surprise aluminium alloy supply shortage.
Meanwhile, new data and macro-economic projections will help the European Central Bank reassess its monetary policy stance in September, ECB Vice-President Luis de Guindos said in an interview with Europa Press. REUTERS
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