Europe open: Philips, tech stocks lead gains early on

(Sharecast News) - European stocks rose on Wednesday, with strong gains from tech stocks and healthcare giant Philips, as investors looked ahead to a crucial inflation report from the US due out in afternoon trade.

By 0955 CEST, the Stoxx 600 was up 0.6% at 508.83, with gains of 0.4% to 0.6% seen across London, Frankfurt, Paris and Milan.

"Today's release of the US March CPI report is anticipated to hold primary significance as the pivotal data release of the week for markets," said Manoj Ladwa, director at ARJ Capital.

The 'stickiness' of inflation over the past two months has sparked concerns on financial markets that the Federal Reserve may hold off from cutting interest rates for longer than anticipated, while the recent surge in oil prices has adding upwards pressure on the price outlook.

"Market expectations regarding US interest rate cuts have experienced a recent moderation following last week's unexpectedly robust employment data. A prospective move in June is currently perceived as a 50:50 proposition, and the complete endorsement of three 25-basis-point cuts by year-end is no longer entirely anticipated," Ladwa said.

Back in Europe, no major economic data was due for release, with eyes starting to turn towards Thursday's European Central Bank meeting, though no change in policy is expected.

"While [ECB chief Christine] Lagarde will likely continue to make a clear case for a June cut, she will likely come short of explicitly calling for one or give any concrete guidance about the potential pace of rate cuts," according to analysts at TD Securities.

Market movers

Tech stocks across the continent were performing well after positive results from Taiwan semiconductor group TSMC, the world's largest contract chipmaker, with first-quarter revenues rising by a better-than-expected 16.5%. ASML and STMicroelectronics were among the best performers in Europe, with the Stoxx Technology 600 index up 1.5% early on.

Chocolate company Barry Callebaut was a high riser on the Stoxx 600, jumping 9% in Zurich despite missing forecasts with a 40% drop in first-half profits, though revenues were 11% higher on the back of rising cocoa prices.

UK retail giant Tesco rose 1% after its annual results showed statutory pre-tax profits were up 160% in 2023 as sales jumped 7.2% on the back of a growing market share. Chief executive Ken Murpphy noted that "inflationary pressures have lessened substantially".

Philips was also performing well, rising 3% in Amsterdam after settling on a consent decree with the DOJ and FDA regarding its the sleep and respiratory care devices under the Respironics brand. The Dutch conglomerate said the agreement "provides clarity and a roadmap to [...] restore the Philips Respironics business", following a recall of respiratory devices in 2021.