Europe: Tech stock rally leads shares higher

[BENGALURU] European shares gained on Monday (Apr 4) with tech stocks rallying more than 2 per cent, while investors kept an eye out for more Western sanctions after Ukraine accused Russia of war crimes.

The pan-European Stoxx 600 index firmed 0.8 per cent, with tech stocks jumping 2.1 per cent, tracking gains in Wall Street's Nasdaq after Elon Musk revealed a 9.2 per cent stake in Twitter.

The sector also got a boost as Delivery Hero surged 10.7 per cent after it launched a debt financing syndication equal to 1.4 billion euros (S$2.1 billion) with proceeds to be used to bolster its liquidity position.

Meanwhile, opinion polls ahead of France's first round of voting on Sunday showed the country faces a repeat of the 2017 election showdown between Emmanuel Macron and Marine Le Pen, with Macron still favoured but in a tighter race.

"Investors have been looking through this election, given the high likelihood that Macron still is in office ... If he wins, it's unlikely to lead to a material shift in allocations," said Dean Turner, economist at UBS.

"Further, unlike the 2017 election, where Macron's opponent was campaigning on a platform of France leaving the euro, no candidate is putting forward such policies. So even if there was a surprise result, the market implications wouldn't be as material as in 2017," Turner added.

France's blue-chip CAC 40 added 0.7 per cent on the day.

Meanwhile, travel stocks including Wizz Air and Deutsche Lufthansa slipped 0.1 per cent each after EasyJet cancelled hundreds of flights due to staff sickness amid a fresh surge of Covid-19. EasyJet fell 0.2 per cent.

However, travel disruptions are being viewed as a temporary issue on a relatively small number of flights, said Craig Erlam, senior market analyst at Oanda, adding that longer-term views of European travel firms remain intact.

Elsewhere, Germany said the West would agree to impose more sanctions on Russia. Sanctions so far have sent commodities prices soaring, fanning inflation fears and piling pressure on the European Central Bank to tighten policy.

This could mean more pain for Stoxx 600, which is down about 7 per cent from its all-time high in January.

"We have cut our overweight to European equities as we see the energy shock hitting that region hardest," wrote BlackRock, the world's largest asset manager, in a weekly note.

Reinforcing fears, investor morale in the euro zone fell to its lowest in nearly 2 years in April, pointing to the beginning of a recession in the second quarter of 2022.

Roche climbed 3.1 per cent after the US Food and Drug Administration granted priority review to its drug to treat Covid-19 in hospitalised adults.

Telecom Italia fell 1.9 per cent as the odds for a KKR takeover receded with the US fund set to make it clear it will not formalise any bid without due diligence. REUTERS