STMicro results trigger tech boost for European stocks

The German share price index DAX graph at the stock exchange in Frankfurt
FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, January 23, 2019. REUTERS/Staff

January 24, 2019

LONDON (Reuters) – European shares inched higher on Thursday as better-than-expected results from chipmaker STMicro delivered a boost to the tech sector, while oil stocks weighed on the market.

The pan-European STOXX 600 <.STOXX> gained 0.1 percent by 0843 GMT, in line with Germany’s DAX <.GDAXI> while Britain’s FTSE 100 <.FTSE> fell 0.4 percent.

Chipmaker STMicroelectronics <STM.MI> jumped 7 percent after reporting a fourth-quarter margin slightly above targets, though it predicted a sharp fall in first-quarter sales.

The tech sector <.SX8P> climbed 1.4 percent as investors pounced on the bit of good news from chipmakers which have been grappling with slowing demand.

AMS <AMS.S>, Siltronic <WAFGn.DE>, Infineon <IFXGn.DE>, ASML <ASML.AS> jumped 3.7 percent to 73 percent.

Disappointing results dented some.

Shares in Danish pharmaceuticals company Novozymes <NZYMb.CO> fell 4.3 percent, the biggest STOXX fallers, after the CFO said Middle East markets were likely to remain weak in 2019.

Italian fashion brand Tod’s <TOD.MI> was also punished by the market, falling 6.2 percent after it said like-for-like sales for 2018 fell 3 percent due to a worsening of the performance in Italy and the rest of Europe.

Broker notes moved some stocks.

Delivery Hero <DHER.DE> shares fell 3.8 percent after JP Morgan cut the stock to “neutral” from “overweight”.

Swiss chocolate maker Barry Callebaut <BARN.S> climbed 4.9 percent with traders citing an upgrade from Goldman Sachs, while Fresenius climbed 3.6 percent after BAML upgraded it to “buy”.

(Reporting by Helen Reid, Editing by Josephine Mason)

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