Europe: Shares end at one-month high, tech stocks tumble
EUROPE’S Stoxx 600 index closed at a one-month high on Thursday (Jul 20), supported by miners, banks and healthcare sectors, although chip stocks saw a heavy selloff after Taiwanese chipmaker TSMC’s bleak sales forecast.
The pan-European Stoxx 600 index was up 0.4 per cent, extending gains to the third straight session. The index hit a day’s high of 464.17 points.
Upbeat corporate earnings and signs of a sharp slowdown in British consumer inflation added to hopes global price pressures eased.
European miners and healthcare sectors rose about 1.6 per cent each, while banks added 0.6 per cent. All sectors were among top performers on the day.
Daniela Hathorn, senior market analyst at Capital.com, said these sectors were among the biggest losers in the first six months of the year
“So it’s not uncommon to see a little bit of a gain. Traders are reassessing that maybe the stocks that have seen such losses in the first half of the year are looking a little bit more attractive at these current levels.”
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Britain’s blue-chip FTSE 100 was also at a one-month high, with Anglo American boosting as it rose 3.3 per cent after the global miner’s first-half copper production surged 42 per cent.
The technology sector, which has gained nearly 23 per cent this year, was the biggest sectoral loser in Europe with a 2.5 per cent drop.
Semiconductor firms including ASML, ASM International and Aixtron fell between 2.7 per cent and 5.6 per cent after TSMC forecast a drop in 2023 sales with global economic woes denting demand for chips.
Second-quarter earnings for Stoxx 600 companies are expected to fall 9.2 per cent from the previous year, based on Refinitiv IBES data.
Saab climbed 4.1 per cent after the Swedish defence group raised its organic sales growth forecast, while Norwegian telecoms operator Telenor gained 6.7 per cent after reporting second-quarter earnings slightly above expectations.
Shares of Volvo Cars dropped 4.2 per cent after the carmaker posted a 54 per cent fall in its second-quarter operating earnings.
Electrolux slumped 20.3 per cent to the bottom of the Stoxx 600 after Europe’s biggest home appliances maker swung to a quarterly loss, followed by a 8.2 per cent drop in Essity after its second-quarter core earnings missed estimates.
Stockholm’s OMX 30 index fell 0.5 per cent, closing at its lowest level in over two months.
The focus will now shift to key central bank meetings due next week, with traders expecting the European Central Bank to deliver a 25-basis-point rate hike. REUTERS
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