By Shashwat Chauhan
(Reuters) -European shares hit one-week highs on Thursday, with chipmakers lifting the technology sector after industry bellwether Nvidia smashed expectations with its quarterly revenue forecast, and as easing bond yields also improved risk sentiment.
The pan-European STOXX 600 was up 0.6%, set for its fourth straight session of gains.
Tech stocks jumped 1.2%, with chipmakers leading gains after Nvidia, the world’s most valuable chipmaker, forecast higher-than-anticipated quarterly revenue and also announced a share buyback programme.
“We think many investors continue to underestimate the amount of investment Nvidia has poured into its ecosystem, and the lead that (it) has given the company in the market,” Jefferies analysts said.
“(It) has translated to a virtuous circle of software developers and platform suppliers embracing Nvidia as the ecosystem of choice for AI workloads.”
Shares of ASM International, BE Semiconductor, ASML Holding and Aixtron rose between 1.7% and 2.4%.
Frankfurt-listed shares of Nvidia advanced 8.7%.
Easing bond yields across Europe further lifted gains, with German bund yields, considered the region’s benchmark, easing to 2.48%. Rate-sensitive real estate stocks gained 1.5%, touching a more than one-week high.
Traders are evenly split between a 25-basis point hike and a pause by the European Central Bank (ECB), a day after a survey showed a downturn in euro zone business activity has deepened far more than thought this month in a broad-based fall across the region, particularly in Germany, Europe’s largest economy.
“Yesterday’s data also supports our view that central banks are close to being done with rate hikes,” said Mohit Kumar, chief financial economist for Europe at Jefferies.
European retailers added 0.6% after falling more than 1% in the previous session.
Looking ahead, market participants will keep an eye on central banks’ meeting at Jackson Hole, in the United States, which begins on Thursday.
ECB President Christine Lagarde and Federal Reserve Chair Jerome Powell are scheduled to speak on Friday.
Among individual stocks, Symrise gained 2.9% after Morgan Stanley upgraded the German flavour and fragrance maker to “overweight” from “underweight”.
Air Liquide rose 1.8% after Berenberg upgraded the French industrial gas company to “buy” from “hold”.
Alk-Abello surged 11.5% after the Danish provider of allergy treatment products’ second quarter operating profit almost doubled year-on-year.
Harbour Energy fell 1.0% after Britain’s largest North Sea oil and gas producer narrowed its annual production forecast range.
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Sherry Jacob-Phillips and Sonia Cheema)
