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Shares in SAP, Europe’s largest software company, rose 4.7 per cent as unexpectedly strong growth in high-margin packaged software licenses fuelled its quarterly earnings. Its second-quarter operating profit rose 9 per cent.
ASML Holding, a key supplier to major semiconductor makers, was up 3.5 per cent after reporting a better-than-expected quarterly profit as customers started taking shipments of its newest tool.
“So far, European earnings have been better than expected, with investors focusing on company guidance to form a view on the market’s likely direction,” said Christian Stocker, equity strategist at UniCredit in Munich.
“The market is definitely getting some boost, at least today, from some strong results from companies like SAP, with the technology sector leading the market higher.”
The STOXX Europe 600 Technology index was up 2.6 per cent, the top sectoral gainer. It has surged nearly 10 per cent since the start of last week and is heading for its best 2-week gain in more than seven years, mainly on the back of a sharp rally in ARM Holdings this week.
ARM spiked 41 per cent on Monday after Japan’s SoftBank agreed to buy Britain’s most valuable technology company for $32 billion in cash.
The sector also got some support after Microsoft reported on Tuesday a 2.1 per cent rise in quarterly adjusted revenue as growth in its cloud business helped to offset weakness in the personal computer market.
The pan-European STOXX Europe 600 and the FTSEurofirst 300 index were both up 0.7 per cent by 0855 GMT (2:25 p.m. in India). They have gained around 10 per cent since a post-Brexit low hit in late June.
Some other firms also rose on positive updates. Lonza shares rose 5.4 per cent, the top gainer in the pan-European FTSEurofirst 300, as the Swiss speciality chemicals and life sciences group raised its guidance for 2016 after reporting the strongest earnings growth in its history during the first six months. Orpea, which runs clinics and homes for the elderly, rose 5.1 per cent after lifting its full-year target. It also said sales in the second quarter to June 30 had risen 20 per cent, boosted by acquisitions and solid demand for its services.
However, gains were capped by weaker miners, with the European Basic Resources index falling 1.2 per cent, the worst sectoral performer, as prices of metals dropped. Anglo American fell 6.1 per cent after lowering its full-year guidance, while BHP Billiton was down 2.1 per cent after it fell 3 million tonnes short of its iron ore production guidance for fiscal year 2016.
Finnish ship engine and power plant maker Wartsila fell 5 per cent after reporting weaker-than-expected quarterly profit and order intake, citing tight competition in the energy markets and overcapacity of ships.
[“source-ndtv”]