European shares end at one-week highs on tech boost

EUROPEAN shares closed higher on Thursday (May 14), after hitting the highest in a week with a boost from technology stocks, while investors remained cautious about developments in the US-China talks.

The pan-European Stoxx 600 ended up 0.8 per cent at 616.05 points on broad-based gains.

The technology sector index jumped 2.6 per cent led by semiconductor stocks, with STMicroelectronics up 5.4 per cent, BE Semiconductor up 3.3 per cent and Infineon jumping 5.7 per cent.

Germany’s Dax advanced 1.3 per cent and led regional bourses higher, with SAP adding 3.6 per cent. Bank of America said the software giant’s ongoing cloud momentum and backlog growth of around 25 per cent could boost revenue by double digits, supported by operating leverage and AI, alongside potential upside from capital deployment.

However, the continent’s exposure to AI hardware firms pales in comparison with its US and Asian peers, prompting many investors to look beyond European markets.

“It’s the theme that’s been working against Europe for the last four years since the debut of ChatGPT in late 2022. That’s been the most persistent reason for underperformance and more recently, it has to do with the energy imports and political instability,” said Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute.

The UK is the latest country to witness political upheaval in Europe after the ruling Labour party’s Wes Streeting resigned as health minister, raising doubts on Prime Minister Keir Starmer’s leadership.

Global attention was also on the US-China bilateral meeting in Beijing. Investors hoped President Donald Trump could encourage China to convince Iran to make a deal with Washington to end the war that has sent crude prices up to US$100 a barrel.

“We await the developments in China ... all eyes are on the Middle East crisis for that to really be resolved,” said Frederique Carrier, head of investment strategy at RBC Wealth Management.

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Among others, luxury brand Burberry shed 6.8 per cent after reporting fourth-quarter sales in line with expectations, while Watches of Switzerland jumped 19.2 per cent on forecasting full-year operating profit above expectations.

Investment company 3i Group slumped 12.7 per cent after its key portfolio company Action’s like-for-like sales growth slowed to 2.4 per cent in 19 weeks to May 10 versus 6.8 per cent in 2025.

On the policy front, the European Central Bank’s chief economist Philip Lane said interest rate hikes might be required to deal with inflation. Money markets currently price in more than two ECB rate increases this year. REUTERS