Tech leads gains in European shares, focus turns to ECB rate decision

Tech leads gains in European shares, focus turns to ECB rate decision By Reuters

Breaking News


Economy 5 minutes ago (Feb 02, 2023 05:14AM ET)

(C) Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, February 01, 2023. REUTERS/Staff

By Ankika Biswas

(Reuters) – European shares climbed on Thursday, led by tech and real-estate stocks, with the focus squarely on the European Central Bank’s interest rate decision a day after the U.S. Federal Reserve acknowledged its progress on curbing stubborn price pressures.

The pan-European STOXX 600 was up 0.7% at 0935 GMT, on track to snap a three-day losing streak after clocking its biggest January gain since 2015, as a milder winter and China’s reopening brightened the outlook for the euro zone economy.

The Euro STOXX Volatility index slipped to an over one-year low, hinting at easing investor anxiety.

Rate-sensitive technology and real estate stocks jumped around 3% each, with the former hitting a ten-month high.

The ECB is expected to raise its deposit rate by 50 basis points (bps) to 2.5% and pencil in more hikes in the next few months, with the only open question being how big these would be. The Bank of England is also poised to raise interest rates by 50 bps later in the day.

“Markets are looking for indications of where rates go from here; given the mixed signals from core inflation remaining sticky, all eyes will be on what the ECB does next,” said Edward Stanford, head of European equity strategy at HSBC PLC.

Wall Street’s main indexes eyed a higher open, with the S&P 500 and Nasdaq jumping on Wednesday after investors took a dovish cue from Chair Jerome Powell’s remarks, following the Fed’s 25-bps hike.

Telecom Italia (BIT:TLIT) climbed 9.0% to the top of STOXX 600 after receiving a non-binding bid for a controlling stake in its fixed-line network from U.S. investment firm KKR.

Frankfurt-listed shares of Meta Platforms Inc (NASDAQ:META) soared 18% on an upbeat first-quarter revenue forecast and a $40-billion share buyback.

Microchips supplier Infineon (OTC:IFNNY) gained 6.3% after bumping up its 2023 outlook, while French software maker Dassault Systemes rose 4.3% on strong 2023 revenue growth forecast.

Shell (LON:RDSa) advanced 2% after a record $40-billion profit in 2022, while Spain’s Santander (BME:SAN) gained 4.1% on reporting an annual growth of 1% in fourth-quarter net profit.

Austrian energy group OMV dropped 5.5% after fourth-quarter core earnings missed estimates.

Earnings growth estimates for STOXX 600 companies during the fourth quarter have halved to 7.3% from 14.5% at the start of January, Refinitiv data showed on Tuesday.

“Earnings have undershot expectations which would suggest that the effects of economic slowdown are beginning to be felt on corporate activity,” Stanford added.

Tech leads gains in European shares, focus turns to ECB rate decision

Our Apps

Terms And Conditions
Privacy Policy
Risk Warning

(C) 2007-2023 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

About the author