European shares led higher by tech stocks ahead of ECB rate decision
For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window
Euro zone business activity expands at fastest rate in a year
Sweden's Elekta tanks after Q4 profit miss
Inditex rises after reporting pick-up in recent sales
STOXX 600 closes up 0.8%
Updated at 1550 GMT
By Shristi Achar A and Shashwat Chauhan
June 5 (Reuters) -European shares gained on Wednesday, led by technology stocks including Dutch semiconductor equipment maker ASML, with focus shifting to the European Central Bank's key rate decision later this week.
The pan-European STOXX 600 .STOXX closed 0.8% higher after falling around 0.5% in the last session, with the technology sector .SX8P leading the charge with an 3.7% gain, its best single-day performance in more than four months.
ASML ASML.AS jumped 8.1% after a Jefferies analyst report cited comments from CFO Roger Dassen suggesting he was positive about the possibility of orders coming through from top customer TSMC 2330.TW in the coming quarters.
Other chip-related stocks BE Semiconductor Industries BESI.AS and ASMI ASMI.AS were up 4.7% each.
Investors are now focused on the ECB's key interest rate decision on Thursday, which is expected to see it ease borrowing costs by 25 basis points from the present record level of 4%.
"A 25 bps rate cut is well telegraphed and so the key question on investors' minds will be the forward guidance on cuts for the rest of the year," said Jason Davis, global rates portfolio manager at J.P. Morgan Asset Management.
"A decision on further cuts this year will ultimately come down to whether services inflation starts to fall from its current level of 4.1% - if the ECB want to remain data dependent, this is probably the message they should send."
On the data front, a survey showed euro zone business activity expanded at its quickest rate in a year in May, as growth in the bloc's dominant services industry outpaced a contraction in manufacturing.
In the foreword to the Slovak central bank's financial stability report published on Wednesday, policymaker Peter Kazimir said the ECB is nearing its first interest rate cut with inflation on a good path.
Also aiding risk appetite, data showed hiring by U.S. private employers slid to a four-month low in May, adding to signs the job market in the world's biggest economy is cooling.
Among other stocks, Inditex ITX.MC jumped 3.7% after the Zara owner reported a pick-up in recent sales from its spring/summer collections.
B&M BMEB.L shed 7.3% after analysts highlighted the absence of news on current trading or precise guidance for the year ahead after the British discount chain reported a 9.7% rise in 2023/24 earnings, in line with expectations.
Elekta EKTAb.ST slumped 18% after the Swedish radiation therapy equipment maker posted a bigger-than-expected drop in fourth-quarter profit.
Reporting by Shristi Achar A and Shashwat Chauhan in Bengaluru; Editing by Varun H K, Eileen Soreng and Jan Harvey
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
