FRANKFURT: European shares recovered towards the close to end higher on Wednesday, after falling earlier in the session when a selloff in technology stocks weighed on markets, while investors assessed corporate earnings.
The pan-European STOXX 600 index ended up 0.2 percent at 571.9. It had declined as much as 0.7 percent earlier in the session. Other major regional indexes also traded higher.
Technology stocks, the top sectoral losers earlier in the day, pared declines to edge down 0.1 percent.
Stock indexes in the US also inched higher after technology stocks, that have been at the centre of equity overvaluation worries globally this week, steadied and data showed private payrolls rebounded in October.
“European markets are piggy-backing on the US today, with an upbeat mood following the positive US job numbers,” said Michael Field, chief equity strategist at Morningstar.
“Risks of an AI bubble may yet come to bite us, but not this week - investors are in a buoyant mood,” he added.
The healthcare stock index declined 1 percent. Novo Nordisk shares fell 4.5 percent after it trimmed its full-year forecasts.
Ambu, down 15.8 percent, slumped to the bottom of the STOXX 600, after the Danish endoscopy solutions maker reported quarterly results below consensus.
Siemens Healthineers slumped 8.6 percent after it reported fourth-quarter sales below analysts’ consensus and issued an earnings outlook that disappointed investors.
Meanwhile, the auto and parts sector, which has logged big losses so far this year, gained 2.3 percent. BMW rose 6.8 percent after its core profit margin rose in the third quarter.
Mercedes-Benz, Renault, and Volkswagen gained between 2.3 percent and 3.5 percent.
Energy stocks advanced 0.9 percent. Vestas rose 14.7 percent to top the benchmark index after reporting third-quarter operating profit above expectations and saying it would launch a share buyback programme.
Valuation fears resurfaced this week on Wall Street and in Asia that have had record-breaking runs this year, driven primarily by enthusiasm for artificial intelligence.
Comments by major US banks on Tuesday further fuelled these worries at a time when the Federal Reserve has also voiced a hawkish hold on interest rate cuts and the US federal government remains in shutdown.
Earnings season in Europe is halfway done and data compiled by LSEG showed that the outlook for European corporate health has substantially improved so far. However, they underperform their US peers.
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