FRANKFURT: European shares finished near two-week highs on Wednesday, aided by defence and technology stocks, as investors awaited a critical earnings report from US chip giant Nvidia, and while caution remained on the US-Iran standoff in the Middle East.
The pan-European STOXX 600 ended 1.5 percent higher at 620.29 points, with major indexes in the region including Germany and France up over 1.4 percent each.
Global investors are keen on AI bellwether Nvidia’s results coming after the US markets close later in the day that could offer clues into how demand for AI infrastructure was faring.
Reuters reported that ASML expects the booming global semiconductor market to be “tense” with tight supply as demand from AI, satellites and robots outpace what the industry can produce. The chip-making machine giant’s shares were up 6.7 percent.
More broadly, European technology stocks jumped 2.9 percent, and the sector has seen the biggest gains this quarter on the STOXX 600. Semiconductor shares such as ASM International and STMicroelectronics were up 3.9 percent and 6 percent on Wednesday.
“ASML has rather lagged the rally that we’ve seen in semiconductors as a whole. So we think there’s scope for strong earnings momentum there,” said Paul Wild, European equity fund manager at J O Hambro Capital Management.
“I’d be a little bit more cautious in terms of some of the chip companies themselves,” he said, adding that valuations among EU semiconductors have surged.
Wild said AI equipment stocks such as Legrand and Schneider Electric offered better exposure to the global rally. Both stocks were up over 3 percent.
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