By Sudeshna Ghoshal
Sept 21 (Reuters) – A rally in technology stocks led European shares higher on Monday, while the fourth consecutive session of declines in oil prices soothed investor nerves and boosted risk sentiment.
The pan-European STOXX 600 was up 0.8% at 640.55 points by 0820 GMT, after dipping 0.6% last week. Most regional bourses also rose.
The moves mark a calm start to the week, with investors assessing whether the pullback in crude can ease inflation pressures after the European Central Bank raised interest rates earlier this month. European economies are vulnerable to a rise in oil prices due to their heavy reliance on fuel imports.
“Despite persistent headwinds and above-target inflation, our view is that economic growth should pick up in the second half of the year, with the outlook in Europe stronger than consensus expectations,” wrote Christian Schulz, chief economist at Allianz Global Investors.
Technology stocks led sectoral gains, advancing roughly 2% on strength in chip-linked shares such as Soitec and Aixtron, which moved in line with their US peers.
Bank stocks advanced 1.6%, boosted by Societe Generale and Banco.
Energy stocks slipped 0.3% as Brent crude futures headed for their longest streak of daily losses since June, following reports that more supply was leaving the Gulf than previously expected, despite the ongoing conflict in the Middle East. [O/R]
Germany’s DAX rose 0.76%, with investors digesting the results of state elections in northeastern Germany, where projections showed the far-right Alternative for Germany emerging as the largest party.
Market participants were also assessing data from Sweden showing that long-term inflation expectations among financial and business groups eased in September.
Attention is now turning to a meeting later this week between US President Donald Trump and Chinese counterpart Xi Jinping for clues on trade relations and the global economic outlook.
Among individual stocks, Lotus Bakeries jumped to the top of the STOXX 600 index, up 6.2%, after Jefferies initiated coverage on the stock with a “buy” rating.
Sweden’s Nordnet advanced 4.1% after the digital bank and online brokerage platform announced a buyback programme.
AstraZeneca slipped 0.8%. The drugmaker said its cancer treatment Enhertu had been recommended for EU approval for use in early breast cancer.
Shares of biotech firm Ipsen fell more than 7%.
(Reporting by Sudeshna Ghoshal in Bengaluru; Editing by Sherry Jacob-Phillips and Mrigank Dhaniwala)
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