Chip makers shine in otherwise struggling European markets

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Chip makers shine in otherwise struggling European markets


European stocks continued to struggle on Wednesday, as extended lockdowns in Germany and the Netherlands have sparked concerns of a slower economic recovery for the region. But fresh data indicated growth could be returning.

Chip makers were standout gainers after upbeat news from U.S. chip making giant Intel.

After losses across Asian markets, the Stoxx Europe 600 index
SXXP,
-0.22%

fell 0.3%, following a 0.2% drop on Tuesday. The German DAX
DAX,
-0.54%

dropped 0.5%, the French CAC 40
PX1,
-0.32%

slid 0.3% and the FTSE 100
UKX,
-0.14%

fell 0.2%. The pound
GBPUSD,
-0.27%

and euro
EURUSD,
-0.13%

also eased as the dollar
DXY,
+0.09%

climbed.

U.S. equity futures
ES00,
+0.35%

YM00,
+0.26%

turned higher, led by a 1% gain for Nasdaq-100
NQ00,
+0.86%

futures. The Nasdaq Composite
COMP,
-1.12%

finished 1.2% higher on Tuesday, with the Dow Jones Industrial Average
DJIA,
-0.94%

and S&P 500
SPX,
-0.76%

halting a two-day skid, underpinned by a modest pullback in U.S. Treasury yields.

Losses in Europe were led by banks as yields
TMBMKDE-10Y,
-0.357%

TMBMKGB-10Y,
0.748%

also eased in Germany and the U.K. Banks are guided by yields as benchmarks for interest rates charged on loans. Shares of HSBC
HSBC,
-1.09%

HSBA,
-1.45%

were down 2%.

With investors rattled by fresh restrictions in major economies such as Germany and the Netherlands, there was some brighter news via a preliminary “flash” reading of the IHS Markit eurozone composite purchasing managers index, which rose to 52.5 in March from 48.8 in February.

“By rising above 50.0, the latest reading indicated the first increase in business activity since last September, with the current expansion the largest recorded since last July and the second-steepest seen over the past 28 months,” said IHS Markit.

Vaccine news will remain in focus, with the European Union on Wednesday expected to announce draft emergency legislation that will allow it to control exports of COVID-19 vaccines, according to a report in the New York Times. That is a day after drug company AstraZeneca
AZN,
-3.52%

AZN,
-0.67%

came under scrutiny over data it supplied to the U.S. about a trial there.

Shares of major oil companies such as Total
TOT,
-2.46%

FP,
+0.28%
,
BP
BP,
-5.09%

BP,
+0.85%

and Royal Dutch Shell
RDS.A,
-4.98%

RDS.A,
-4.98%

remained pressure, a day after oil prices tumbled 6% into correction territory over concerns about COVID-19 lockdowns crimping demand and economic rebounds. Both U.S.
CL.1,
+3.06%

and global oil prices
BRN00,
+2.94%

clawed back some ground on Wednesday. U.S. crude rose 0.7% and Brent gained 1% after a massive cargo ship got stuck in Egypt’s Suez Canal, a vital waterway for global shipments.

Read: The ECB’s Lane says lockdowns won’t derail European recovery. The market is starting to get jittery.

Shares of semiconductor companies ASML Holding
ASML,
-2.97%

ASML,
+4.74%

and ASM International
ASM,
+6.69%

climbed 4% and 6%, respectively, after Intel
INTC,
-3.28%

late on Tuesday announced aggressive plans to expand its manufacturing capacity. 

“Intel’s update yesterday pointed to elevated and sustained capex in the near future, a positive for the semiconductor equipment industry,” said Tammy Qiu, analyst at Berenberg, in a note to clients.

Shares of Carrefour
CA,
+0.78%

rose 0.4%. The French retail chain said its Brazilian unit has entered into an agreement with U.S. retail giant Walmart
WMT,
+1.19%

and private-equity firm Advent International to buy Brazilian food retailer Grupo BIG Brasil in a deal valuing the company at roughly €1.1 billion ($1.30 billion).



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