European shares edge higher as lower oil prices lift sentiment

EUROPEAN shares rose on Tuesday (Oct 13) as lower oil prices lifted appetite, though technology stocks came under pressure after reports of advances by Chinese memory-chip maker ChangXin Memory Technologies fuelled concerns about intense competition from Beijing.

The pan-European Stoxx 600 edged 0.44 per cent higher to 638.44 points by 0714 GMT, with London’s FTSE 100 gaining roughly 1 per cent, the strongest performance among regional indexes.

Oil prices fell as traders assessed supply risks following attacks on Saudi Arabia and weighed the prospect of additional diesel supplies from Russia.

The chemicals sector climbed 2 per cent to lead gains across sectors.

The technology sector fell 1.5 per cent, tracking a global selloff after reports of advances by ChangXin (CXMT) fuelled concerns that China is narrowing the technology gap with established rivals.

“Technology stocks led the weakness, particularly memory-chip names, after China’s CXMT announced progress on a denser DRAM design and plans to launch a new server-memory product by year-end, raising concerns over greater competition for established memory-chip producers,” OCBC analysts said in a note.

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Among individual stocks, LVMH edged higher despite reporting weaker-than-expected third-quarter sales, as deteriorating consumer sentiment in China weighed on demand for its Louis Vuitton and Dior brands.

Shares of Nokia fell 4.4 per cent after the Finnish telecom gear maker agreed to sell its Enterprise Campus Edge business to private equity group Aurelius.

Investors will also watch for key September data from Germany, Europe’s largest economy, due later in the day. REUTERS