FRANKFURT: European shares rose on Tuesday, as technology stocks led gains on the back of renewed AI optimism and offset concerns stemming from higher oil prices and bond yields.
The pan-European STOXX 600 was up 0.7percent at 642.94 points by 11:05 GMT. Most other regional indexes also traded higher. Technology shares led sectoral gains, rising 2.5percent to their highest level in a month. Semiconductor stocks AT & S Austria Technologie & Systemtechnik AG and Soitec gained more than 6percent each.
Anthropic is making a massive bet that AI will transform the global economy more profoundly than industrialization, electricity and the internet, according to its IPO prospectus seen by Reuters. The IPO is seen valuing the AI lab at more than USD2 trillion.
“It’s the vision and the projections to the extent to which Anthropic believes AI will be a game changer for economies around the world that seem to have lifted demand for European tech stocks,” said Susannah Streeter, chief investment strategist at Wealth Club. Earlier this month, executives from several major AI companies urged a slower pace of development over concerns about misuse, weighing on technology stocks already pressured by rising bond yields.
“The prospectus has brought back to the forefront excitement surrounding the IPO trade, which struggled recently after these AI companies called for a slowdown,” said Fiona Cincotta, senior market analyst, StoneX.
Global bond yields remain near multi-decade highs as investors grapple with inflation risks from rising energy costs. Oil prices climbed as the lack of a breakthrough in the Middle East conflict kept Brent crude futures at USD105.47 a barrel.
European economies are particularly vulnerable to surging energy prices because of their reliance on fuel imports. Christine Lagarde, European Central Bank President, said on Monday that this year’s inflation surge has yet to generate significant second-round effects across the euro zone, suggesting a measured policy response remains appropriate.
The ECB raised interest rates earlier this month. Among individual stocks, Lindt slipped 8.3percent to become the STOXX’s biggest decliner.
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