European stocks climbed on Wednesday in a broad-based bounce that saw the weakened tech sector recuperate losses after an extensive sell-off prompted by concerns over iPhone demand and pricey valuations.
The STOXX 600 was up 0.7 percent to €353.52 and was on track to end five straight days of declines that has led the pan-European benchmark near to the almost two-year low marked in October.
Germany’s DAX gained 0.9 percent to €11,171.33, while UK’s FTSE 100 rose 1 percent to £7,017.11.
Despite the rebound being broad-based with the majority of sectors showing optimism, investors, however, remained wary about the outlook for the market due to lingering worries over a slowing economic and earnings growth.
Anlyst Michael Hewson said the record highs for the FTSE 100 and the DAX now seem a distant memory and with the US FAANG (Facebook, Apple, Amazon, Netflix and Google) rally now also in bear market territory, the big question now is how much further the fall is, or are they near a short term base.
Italian Banks Pare Gains
Italian banks also advanced after League Party leader and deputy Prime Minister Matteo Salvini was reported to be prepared to make revisions on the 2019 draft budget.
FTSE Italia All-Share Banks added 2 percent to €7,797.99 after advancing as much as 2.6 percent at the open, following a report about Salvini willing to go over the government’s budget, raising expectations that Italy could avoid a spat with the European Commission.
The index later eased from highs after the League Party denied the report, stating that Salvini was not seeking any compromises to the 2019 budget. The European Commission is due to release its response to the Italy’s draft proposal later in the day.
Italian banks have shed about €40 billion in market capitalization from their peak reached in May.
That came as concerns over the country’s spending plans lifted government bonds yields to multi-year highs, pushing the value of their huge sovereign bond portfolios down and increasing the risk of likely capital injections for the weaker lenders.
The broader Stoxx 600 Banks, which added 1.4 percent earlier in the session, became the largest sectoral gainer in early morning trading. The index last stood 1.3 percent higher to €141.63.
The STOXX Europe 600 Technology also traded in the green, climbing 1.4 percent to €401.37 after slipping to their lowest since the end of February.
Meanwhile, US stock futures edged higher on Wednesday, after the heavy two-day selloff weighed on the S&P 500 and the Dow for the year.
Smartphone maker Apple Inc. and other major tech and internet firms, which dropped a combined $1 trillion of their market value on Tuesday, recuperated some of their losses in pre-market trading ahead of Thanksgiving Day.
Concerns over a slowing global economy and peaking corporate earnings have depleted risk appetite in recent months, raising uncertainty about the longevity of the decade-old bullish run for stocks.
Tech-heavy Nasdaq 100 hit its lowest in about seven months on Tuesday, while the S&P 500 and the Dow stumbled over 1 percent for the year after tech stocks’ continued plunged and a set of disappointing retail earnings and forecasts spoiled the mood.
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