© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, August 16, 2023. REUTERS/Staff/File Photo
By Ankika Biswas and Shashwat Chauhan
(Reuters) -European shares extended their rebound on Tuesday as chipmakers led a rally in technology stocks ahead of Nvidia (NASDAQ:)’s earnings, while Ubisoft touched a three-week high on “call of duty” maker Activision’s plans to sell streaming rights to it.
The pan-European closed up 0.7%, after rising as much as 1.2% intraday, advancing for the second day.
Technology jumped 2%, touching a one-week high, boosted by a 0.7%-3.3% advance in Amsterdam-listed chipmakers ASML Holding (NASDAQ:) N.V., ASM International (OTC:) N.V and BE Semiconductor Industries N.V. on optimism surrounding the world’s most valuable chipmaker Nvidia’s quarterly results on Wednesday.
Paris-listed shares of Franco-Italian chipmaker STMicroelectronics also added 2.5%.
“Markets are hoping that the AI (artificial intelligence) hype is going to result in some profitability,” said Giles Coghlan, chief market analyst at HYCM.
Meanwhile, Activision Blizzard (NASDAQ:) is set to sell its streaming rights to Ubisoft Entertainment, sending the French company’s shares up 8.5% to the top of STOXX 600.
Continuing to boost the healthcare sector was a 0.7% gain in Novo Nordisk (NYSE:), Europe’s second most valuable listed company.
European miners added 1.9%, tracking higher metal prices.
At the top of investors’ watch list is the Jackson Hole Symposium later this week, where European Central Bank President Christine Lagarde and Federal Reverse Chair Jerome Powell are expected to provide clues about the interest rate outlook.
The STOXX 600 is headed for its worst month so far this year, with rising bond yields across Europe battering stocks in August.
“I don’t see any signs of a deep recovery because it’s based on very weak sentiment … There isn’t any fundamental change in the economic setup to support a resurgence in stocks,” Coghlan said.
An improvement in China’s economic outlook, lower Fed and ECB interest rates and a Russia-Ukraine ceasefire could potentially pull European stocks out of the woods going ahead, Coghlan added.
A Reuters poll showed a slowdown in global growth is likely to offset an attractively valued European equity market for the rest of 2023, but with price pressures easing, a more pronounced upturn could be on the cards for 2024.
Among individual stocks, Italian cable maker Prysmian gained 4% on getting selected as the “preferred bidder” for three projects in Germany worth 4.5 billion euros ($4.88 billion), while British recruiter Hays gained 4.1% following a Exane BP (NYSE:) Paribas rating upgrade to “outperform” from “neutral”.
On the flip side, Norwegian fish farmer Bakkafrost tumbled 9.7% to the bottom of the STOXX 600 on warning of environmental challenges in its operations in Scotland, which will affect the yearly harvest.
($1 = 0.9218 euros)
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