Rebound in technology stocks buoys European markets

A recovery in tech stocks and fresh optimism over troubled Italians banks lifted European shares from seven-week lows on Tuesday. The pan-European STOXX 600 index ended up 0.6 per cent, almost fully recovering losses from the previous session. Tech stocks rose more than 1 per cent after Monday's sell-off, when concern over valuations at US companies spilled over to Europe, particularly companies supplying Apple.

"The tech sector has been relied upon as the driver of the bull run, particularly in the US, so whenever there is any weakness that's observed there, it is quickly picked up by the market," said Jonathan Roy, advisory investment manager at Charles Hanover Investments.

DUBLIN

Mirroring gains elsewhere, the Iseq closed 43 points up at 6,993. Bank of Ireland bucked the positive trend among European financials, trading down 2 per cent to 22.6 cents. This followed an announcement by the bank that it had cut mortgage rates for fixed rate customers by as much as 0.35 per cent on foot of increasing competition in the mortgage market here. Permanent TSB also went into reverse with shares falling 0.5 per cent to €2.86.

AIB shares, meanwhile, plunged by as much as 28.5 per cent with the upcoming IPO price set well below where the stock had been trading on Monday.

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Iseq heavyweight Ryanair continued its upward trend of recent weeks, climbing 0.8 per cent to €18.23, which was in line with the airline sector as a whole. Building materials group CRH closed up 0.6 per cent at €32.30, recovering some of the losses from the previous session.

LONDON

UK blue chips eased on Tuesday as a bounce in the pound hit export-oriented companies, overshadowing a recovery in tech stocks, while a rally in outsourcing firm Capita led mid-caps higher.

There was relief after Monday's tech stocks sell-off, which hit UK tech firms Micro Focus and Sophos, but trading remained muted with the FTSE 100 ending down 0.15 per cent as investors continued to sift through the fall-out from Britain's election.

The blue-chip index reversed earlier small gains as big international firms such as British American Tobacco and GlaxoSmithKline progressively lost ground, as high inflation numbers helped the sterling recover. Capita jumped 15 per cent to its highest level in eight months after its trading update suggested green shoots of recovery were appearing.

EUROPE

Dialog Semiconductor, Infineon and ASM International were among the tech stocks gaining the most, rising 1.2 to 4.7 per cent. Italian banks were another bright spot, gaining 1.1 per cent amid renewed hopes for a rescue of struggling Veneto banks.

Italy's economy minister said a solution was "close" . UBI Banca and BPER Banca led European banks, rising 3.4 per cent and 2.5 per cent respectively. UniCredit gained 1.6 per cent.

Greek shares rose 1.6 per cent after officials said a compromise on debt may be reached on Thursday, paving the way for new loans for Athens while leaving the contentious debt relief issue for later.

NEW YORK

The Dow Jones Industrial Average hit a record intraday high as bank stocks rose ahead of a highly anticipated interest rate hike and as technology stocks rebounded. Traders have priced in a 94 per cent chance of the Federal Reserve raising interest rates.

Technology stocks staged a recovery on Tuesday. Apple, which had sparked the sell-off, was up 1.3 per cent at $147.29 and boosted the S&P 500 and the Nasdaq. Big technology names like Microsoft, Alphabet and Facebook were also up about 1 per cent, propping up the S&P technology sector.

Financials were also up 0.4 per cent, helped by gains in big banks after the US Treasury Department announced sweeping changes to banking regulations on Monday.

Shares of Bank of America, Wells Fargo and JPMorgan were up about 1 per cent. Goldman Sachs 1.5 per cent gain was the driver behind the Dow's record intraday high. Restaurant chain operator Cheesecake Factory was down down nearly 10 per cent at $52.61 after it warned of a decline in comparable store sales in the current quarter.

Additional reporting by Reuters/Bloomberg