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Europe: German shares hit half-year high as SAP surges, broader Europe ticks lower

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[BENGALURU] German shares hit their highest in 6 and a half months on Wednesday, outperforming their European peers as a surge in software firm SAP helped technology post their best days since August 2015, while the broader market ticked lower as a dip in crude prices weighed on oil majors.

German shares rose 0.6 per cent, extending their winning streak to the ninth straight session - its longest since February 2015.

SAP soared 12.6 per cent to an all-time high and gained more than 14 billion euros (S$21.34 billion) in market capitalisation as activist investor Elliott Management disclosed a 1.2 billion euro stake in the company and said it supported a new management efficiency drive.

The company also set ambitious new mid-term targets after reporting a first-quarter loss.

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The top performer on the DAX was Wirecard which climbed 8.5 per cent after the payments company confirmed Japan's Softbank Group Corp will buy a 5.6 per cent stake in the firm.

SAP's surge sent the tech sector soaring 4 per cent and post its biggest one-day jump since August 2015.

Meanwhile, the pan-European STOXX 600 index ended 0.1 per cent lower, breaking an eight session winning run during which it gained 1.5 per cent.

After opening lower weighed by signals that China has put broader stimulus on hold, the index briefly gained as strong earnings from Credit Suisse and SAP outweighed. But, it reverted to losses as a dip in oil prices pulled energy stocks lower.

London's FTSE 100 fell 0.7 per cent as oil majors BP PLC and Royal Dutch Shell weighed. Along with French peer Total, they were the biggest drags on the pan-region index and pulled Europe's oil and gas sector 1.8 per cent lower.

Swiss stocks climbing to a record high also helped limit the broader index's losses. Novartis' gained 2.4 per cent rise drove gains on the Swiss index as the drugmaker raised its 2019 guidance after a first-quarter earnings and sales beat.

Shares in Milan and Madrid fell the most in the region, both down more than 0.7 per cent, with banks weighing on IBEX.

"The banking sectors is still struggling with a fat yield curve, the level of interest rates and the European Central Bank's overall policy, with our expectations that deposit rates will remain at these levels till 2020," said Stefan Koopman, a Eurozone market economist at Rabobank.

Swiss lender Credit Suisse, kicked off first-quarter balance sheet assessment for banks in the region, posting a surprise profit and saying it was cautiously optimistic about the second-quarter.

Its shares pared most gains to close marginally higher.

Results from Credit Suisse will be followed by UBS Group AG and Barclays on Thursday and Deutsche Bank on Friday.

German drugmaker Bayer slipped a day ahead of first-quarter earnings. A Reuters poll sees underlying core earnings jumping 42 per cent for the quarter.

Online gaming company Kindred Group plc lost nearly 9 per cent and landed at the bottom of STOXX 600 after profits for the first-quarter were significantly impacted by a new local license in Sweden.

Auto stocks dropped 0.7 per cent, led by Renault after its Japanese partner Nissan Motor Co slashed its full-year profit forecast to its lowest in nearly a decade due to weakness in the United States.

REUTERS