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Europe: Stocks rise, Huawei reprieve boosts tech shares
[BENGALURU] European shares rose on Tuesday, with tech stocks contributing to gains as they recovered some ground lost in the previous session following a temporary easing of US restrictions on China's Huawei.
The Unites States allowed Huawei Technologies to buy US-made goods to maintain existing networks and provide software updates to existing Huawei handsets until Aug 19 after blocking it from buying US goods last week.
The pan-European Stoxx 600 gained 0.5 per cent, with Germany's trade-sensitive DAX rising 0.9 per cent. London-traded stocks pared gains as the pound firmed on Prime Minister Theresa May's comments about the next Brexit votes.
"I think the easing up on Huawei is being seen as a sign that while the United States and China are unhappy with each other, neither side wants to burn the negotiation bridge at the moment," said Connor Campbell, an analyst at Spreadex in London.
The tech sector rose 1.6 per cent, making back a chunk of Monday's 2.8 per cent slide. Chipmakers Infineon Technologies, AMS and STMicroelectronics gained between 1 per cent and 4.2 per cent.
Telecom Italia rose 2.3 per cent as it posted first quarter results and confirmed its guidance for the next three years. The firm's chief executive said it was in touch with five banks over plans to create a joint venture to offer consumer credit services.
Italy's biggest phone group reported a "solid set of results", with core earnings beating the consensus expectation of analysts, Deutsche Bank said in a note.
Norsk Hydro climbed 5.6 per cent as a Brazilian federal court allowed the Oslo-traded firm to resume full output at the world's largest alumina refinery for the first time in more than a year.
Oil and gas stocks added 1 per cent, with Vestas Wind Energy leading the gains with a 3.9 per cent rise. The Danish firm secured an order from Finland's Fortum for a 90 megawatt wind project and launched a wind turbine targeting the US market.
Banks rose 0.7 per cent, lifting off Monday's more-than three-month closing low.
As risk appetite crept back into markets, defensive stocks in sectors such as telecommunications underperformed.
However, stocks are not yet out of the woods, still plagued by investor uncertainty regarding the US-China trade war.
"We've had a very powerful rally (year-to-date) and if there is a continued escalation or a failure to resolve where we go from here, there is certainly downside in equity markets," said Simon Webber, lead portfolio manager on the global & international equities team at Schroders.