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Europe: Tumbling techs dominate stocks, despite bank bounce
[MILAN] Persistent weakness in tech stocks outweighed strong financials on Monday, while a climb in the euro dented euro zone markets, leaving the pan-European Stoxx 600 index 0.1 per cent lower.
Euro zone blue-chips tumbled 0.3 per cent as the single currency edged 0.3 per cent higher, weighing on its mainly foreign-earning constituents. Britain's FTSE meanwhile outperformed and was up 0.7 per cent thanks to a weaker pound.
A rotation out of the highly-valued tech sector, which has gained the most in Europe so far this year, saw investors shift to financials instead.
Chipmaker Dialog Semiconductor was among the biggest fallers, down 3.2 per cent, along with software firm Temenos and video games producer Ubisoft.
Also weighing were utilities and telecoms, two sectors which tend to underperform when interest rates rise, making their steady dividend flows less attractive.
Traders said markets would likely remain quiet before the much awaited Fed meeting, which is widely expected to raise rates, a measure that could support banking stocks.
"There is not much major data scheduled to be released today, which makes range-trading the most likely scenario... Also with the FOMC meeting just around the corner many traders might prefer to remain on the sideline for now," said Markus Huber, trader at City of London Markets.
Relief after last week's deal on new global banking rules also helped banks give a boost to European markets.
HSBC was the biggest gainer, up 2.2 per cent, while among other heavyweight banks, UBS rose 1.3 per cent and Denmark's Danske Bank gained 2.1 per cent.
Deutsche Bank fell 0.9 per cent, despite its finance chief telling a German paper that it was able to cope with stricter capital rules agreed last week.
Top gainers on the Stoxx were South African retailer Steinhoff, which rose 24.4 per cent to break three sessions of dramatic losses stemming from its discovery of accounting irregularities, and Altice.
The French telecoms and cable firm jumped 11.1 per cent in a slight relief rally. The stock, hammered by concerns over its debt, was still down 50 per cent from the start of November.
Oil and gas stocks also supported the index as crude prices rose, with Tullow Oil up 4.1 per cent and TechnipFMC up 4.2 per cent.
AB InBev reversed early gains to edge 0.1 per cent lower after Reuters reported it is among the brewing groups looking to bid for a stake in Vietnam's largest brewer in a US$5 billion sale process.