(Bloomberg) — European shares struggled to make progress on Wednesday, with a rally in technology stocks barely keeping the benchmark afloat amid disappointing gains in the banking and luxury sectors.
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The Stoxx Europe 600 was about 0.1% higher after its biggest two-day gain since November. The tech subindex climbed 2.3%, bringing this week’s gain to 5%. ASM International NV rose after orders exceeded expectations, with chipmakers also taking heart from the optimistic outlook of US-based Texas Instruments Inc.
Banks weighed on the index, with Lloyds Banking Group Plc falling after falling short of estimates for lending income. Svenska Handelsbanken AB fell as much as 11% after Sweden’s largest real estate lender missed analysts’ profit expectations. Kering SA slumped, dragging down the luxury sector, after warning profits would fall due to slowing sales at Gucci, its biggest brand.
US stock futures advanced, with contracts on the Nasdaq 100 outperforming. Tesla Inc.’s profits represented about a third of the rally in Nasdaq futures alone, according to data compiled by Bloomberg. The electric car maker rose more than 10% in premarket trading after accelerating the launch of cheaper cars in a bid to revive sagging demand. Texas Instruments climbed more than 6%.
In addition to the strong performance of U.S. tech giants in Tuesday’s rally on Wall Street, the weak measure of business activity in the world’s largest economy also helped keep predictions for an easing of Federal Reserve policy alive this year. The yield on ten-year government bonds was higher and the gauge for the dollar remained stable.
The S&P 500 posted its best consecutive rally in two months. Nvidia Corp., the figurehead of the artificial intelligence boom, led a wave of chipmakers. Texas Instruments Inc. issued a bullish sales forecast – a good sign for the chip industry that helped lift Asian and European manufacturers on Wednesday.
In other earnings and business news boosting European stocks on Wednesday:
Shares of Evotec SE plunged as much as 31% after the German pharmaceutical company’s annual results showed weak expectations.
Volvo Car AB tumbled as much as 8.8% after the Swedish automaker missed first-quarter profit expectations.
Roche Holding AG fell as much as 3% after scaling back its pipeline of experimental drugs, as its new CEO tries to revive growth after a series of research setbacks.
Reckitt Benckiser Group Plc rose as much as 5.8% after the consumer healthcare giant delivered a positive sales surprise.
Kone Oyj rose after the elevator maker reported first-quarter results that largely met expectations.
Shares of Heineken NV rose after the brewer reported organic beer volumes and organic sales above expectations for the first quarter.
Oil gained as an industry report showed U.S. crude inventories were shrinking and traders tracked progress toward new sanctions on Iran. Gold went higher.
Elsewhere, the yen remained just a fraction away from key levels against the dollar, with a former Japanese currency official warning the country is on the brink of currency intervention.
Earnings on watch
In the late hours in the US, Tesla rose as the electric car giant struck an optimistic tone despite a sales miss, the first of the “Magnificent Seven” megacaps to report. The stock ended a seven-day plunge and climbed along with other members of the group.
In addition to Tesla, Microsoft Corp., Meta Platforms Inc. will also participate. and Alphabet Inc. report earnings this week. According to data from Bloomberg Intelligence, profits for the “Magnificent Seven” group – which also includes Apple Inc., Amazon.com Inc. and Nvidia Corp. – is expected to increase by approximately 40% in the first quarter compared to a year ago.
The group of tech megacaps is crucial for the S&P 500, because the companies have the heaviest weightings in the benchmark. After this year’s progress, valuations have become lofty. After the latest sell-off, the Magnificent Seven was still trading at a combined 31 times forward earnings, according to data compiled by Bloomberg.
Main events this week:
IBM, Boeing, Meta Platforms earnings, Wednesday
Malaysia CPI, Thursday
South Korea’s GDP, Thursday
Tariff decision Turkey, Thursday
US GDP, wholesale inventories, initial unemployment claims, Thursday
Microsoft, Alphabet, Airbus, Caterpillar earnings, Thursday
Japan interest rate decision, Tokyo CPI, inflation and GDP forecasts, Friday
Personal income and spending in the US, University of Michigan consumer sentiment, Friday
Exxon Mobil, Chevron earnings, Friday
Some of the major moves in the markets:
Shares
The Stoxx Europe 600 rose 0.1% as of 9:41 a.m. London time
S&P 500 futures rose 0.2%
Nasdaq 100 futures rose 0.6%
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index rose 1.7%
The MSCI Emerging Markets Index rose 1.6%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro fell 0.2% to $1.0684
The Japanese yen was little changed at 154.89 per dollar
The offshore yuan was little changed at 7.2661 per dollar
The British pound fell 0.2% to $1.2426
Cryptocurrencies
Bitcoin rose 0.3% to $66,556.51
Ether rose 1.3% to $3,249.9
Bonds
The yield on ten-year government bonds rose by three basis points to 4.63%
The German ten-year yield rose by three basis points to 2.53%
The British ten-year yield rose by five basis points to 4.29%
Raw materials
Brent crude fell 0.1% to $88.32 per barrel
Gold fell 0.2% to $2,317.67 an ounce
This story was produced with the help of Bloomberg Automation.
–With help from Winnie Hsu, Michael Msika and Jan-Patrick Barnert.
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