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European equities rose on Tuesday following an overnight rebound in Big Tech stocks on Wall Street as investors anticipated the sector would post strong corporate results this week.
Europe’s region-wide Stoxx 600 rose 0.8 per cent, while France’s Cac 40 and Germany’s Dax gained 1 per cent.
The Euro Stoxx 600 Technology index led gainers in the region, up 2 per cent, after US peers pushed the tech-heavy Nasdaq Composite and the Fang+ index, which tracks some of the sector’s megacap companies, close their strongest trading sessions since late July.
Shares of US chipmaker Nvidia jumped 8.5 per cent on Monday and gained 0.3 per cent in after-hours trading as investors anticipated the company would release strong earnings later in the week.
Sentiment around semiconductor stocks was also boosted by the release of British chip designer Arm’s Nasdaq listing prospectus, starting the countdown to the biggest US initial public offering in almost two years.
Dutch group ASML, one of Europe’s biggest companies by market capitalisation, rose 3 per cent, while France’s STMicroelectronics added 2.5 per cent.
Futures contracts tracking the Nasdaq Composite advanced 0.4 per cent ahead of the New York open, while those tracking the benchmark S&P 500 gained 0.2 per cent.
The US tech rebound buoyed market sentiment in Asia, where Japan’s Topix gained 1.1 per cent, Hong Kong’s Hang Seng rose 1 per cent and China’s CSI 300 advanced 0.8 per cent.
Investors are looking ahead to this week’s economic policy conference in Jackson Hole, Wyoming, where Federal Reserve chair Jay Powell is expected to signal the future path for US interest rates.
“The general consensus appears to be for a slightly hawkish leaning tone from the Fed Chair, [ . . . ] with a pushback against the discount of rate cuts further out,” said Padhraic Garvey, regional head of Americas research at ING.
A recent string of strong economic data in the US has pushed investors to bet that the central bank will keep the federal funds rate elevated for a while longer, having taken it to a 22-year high at the last policy meeting.
Yields on the benchmark 10-year US Treasury were flat at 4.34 per cent on Tuesday, a day after they hit their highest level in 16 years. Bond yields rise as prices fall.
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