Economic news

Tech Lifts European Shares Despite Hawkish ECB Signals

  • Tech follows U.S. peers higher
  • Hawkish ECB boosts euro, banks
  • Symrise slides on EBITDA miss

Jan 23 (Reuters) - European stocks edged higher on Monday, lifted by technology and mining shares, as expectations of a mild recession in the euro zone offset hawkish remarks from European Central Bank (ECB) officials that sent the euro to a nine-month high.

The pan-European STOXX 600 index rose 0.2% after posting its first weekly decline of the year on Friday. Tech stocks jumped 1.4% after their Wall Street peers rallied on Friday following upbeat results from streaming giant Netflix Inc.

The euro climbed 0.4% and euro zone banks added 0.7% after ECB governing council member Klaas Knot said on Sunday the central bank was set to increase interest rates by 50 basis points in both February and March and would continue to raise rates in the months after.

Investors will look for more clues on the central bank's tightening plans when ECB President Christine Lagarde speaks later in the day.

The benchmark STOXX 600 index hit a nine-month high last week as a warm winter in Europe, evidence of moderating inflation and China abandoning its tight COVID-19 rules brightened the outlook for Europe's economy.

With the earnings season underway, investors are waiting to see if the results will continue to support the recent rally in markets.

Fourth-quarter earnings for STOXX 600 companies are forecast to have grown by 10.7% year-on-year, the slowest in two years, according to Refinitiv I/B/E/S data.

Focus this week will also be on January business activity data for euro zone and the UK to gauge the state of the European economy amid worries of a recession.

"PMI data due tomorrow could confirm that the European economies took a softer hit thanks to mild start to the winter, and cheaper energy prices as a result of it," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Among single stocks, Symrise fell 7.1% after the German flavour and fragrance maker reported a lower-than-expected EBITDA margin for 2022 and announced impairment for Swedencare AB.

Shares of Swiss peer Givaudan slipped 1.5%.

Remy Cointreau rose 2.3% after Citigroup upgraded the French spirits maker's stock to "buy".

Reporting by Sruthi Shankar in Bengaluru; Editing by Sherry Jacob-Phillips

Source: Reuters

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