PARIS: European shares rose on Tuesday as Swiss stocks firmed on a forecast upgrade by drugmaker Novartis, though a slide in shares of Sweden’s Tele2 pushed the telecom sector index to its lowest level in over six months.
The pan-European STOXX 600 ended 0.6% higher, after declines on Monday amid weak economic data from China pummelling Europe’s luxury sector.
Falls in the sector at the start of the week amid worries about China’s faltering economic growth pressured the main index after stellar gains last week driven by hopes that the US Federal Reserve’s interest rate hiking cycle was close to an end.
“European investors are reassessing the depths of yesterday’s sell-off and doing some bargain hunting,” said Steve Sosnick, chief strategist at Interactive Brokers.
Novartis climbed 4.6%, helping boost the STOXX 600, after raising its full-year earnings guidance and mapping out plans to spin off its generic medicines division Sandoz in early October.
The Swiss Market index, which had led regional declines in Europe on Monday, gained 1.2%.
Europe’s healthcare sector, up 1.2%, also got a boost from 3.4% gains in shares of Swedish Orphan Biovitrum (SOBI) after the drugmaker posted upbeat quarterly earnings.
Telecom firms slipped 0.9%, to their lowest level since late December, with Tele2 AB plunging 10.6% to a five-year low following “mixed” second-quarter results.
Meanwhile, analysts have pointed to sticky price pressures in the euro zone and the UK, which could lead to further monetary tightening in those regions.
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