PARIS: European shares cooled off after five straight sessions of gains on Monday as bank shares led declines, while semiconductor stocks slipped after a report that the world’s largest contract chipmaker, TSMC, was cutting its annual costs outlook.
The pan-European STOXX 600 index ended flat, still holding near one-year highs, while the blue-chip STOXX 50 index dipped 0.1%, remaining at levels close to a 22-year peak hit last week.
European chip equipment maker ASML fell 4.0%, leading declines among the broader technology sector index , which fell 1.1%.
The report in Taiwan’s Economic Daily News said Taiwan Semiconductor Manufacturing Company (TSMC) had lowered its costs outlook for 2023. ASML is one of TSMC’s suppliers, and China is the Dutch chip company’s third-largest market.
ASM International, BE Semiconductor and Aixtron fell between 0.9% and 3%.
European bank stocks, which had ended last week nearly 4% higher, fell 1.4% on Monday.
“Financials are a little bit lower, but that’s a little bit of normal profit taking,” said Steve Sosnick, chief strategist at Interactive Brokers.
Investors turned optimistic about lenders after US reporting season kicked off last week, with Wall Street banks such as JPMorgan Chase & Co, Citigroup Inc and Wells Fargo & Co surpassing earnings expectations, benefiting from rising interest rates and easing fears of stress in the banking system.
Markets now await reports from Goldman Sachs, Morgan Stanley and Bank of America through the week.
“‘Muted’ is perhaps the best way to describe the session,” said Chris Beauchamp, chief market analyst at online trading platform IG.
“Overall stocks continue to defy expectations of a fresh downturn, and while it is very early days earnings season has not yet provided much of a bearish catalyst.” After a rollercoaster month, with the forced rescue of Credit Suisse and uncertainty over the interest rate outlook, European shares have still managed to rise about 10% so far this year, compared to the S&P 500 index’s 7.5% gain.
Payments providers Worldline gained 2.2% and Nexi added 1.4%, boosted by a takeover proposal for companies’ peer Network Intentional.
Shares of Rovio jumped 18.1% after Japan’s Sega agreed to launch a 706 million euro offer for the Angry Birds maker.