Monday, 19 Oct 2020

European shares tepid at the end of strong quarter

(Reuters) – European shares were largely flat on Tuesday as investors booked some profits following a strong quarterly rebound, while improving China factory data and hopes of more U.S. stimulus buoyed sentiment in Asia.

The pan-European STOXX 600 index looked set to post its biggest quarterly gain since March 2015 with a 12.5% rise, as unprecedented economic stimulus, hopes of a COVID-19 vaccine and relatively fewer coronavirus cases in Europe powered a rebound from March lows.

Still, the index is down 13.5% for the year.

The trade-sensitive German DAX .GDAXI rose 0.2% after data showed China’s factory activity expanded at a stronger pace in June as the government lifted lockdowns and stepped up investment.

Chipmakers STMicroelectronics (STM.MI), Infineon Technologies (IFXGn.DE), ASM International (ASMI.AS) rose between 1.4% and 2.8% after an upbeat revenue forecast from U.S. firm Micron Technology (MU.O).

The broader STOXX 600 index was up 0.1% by 0720 GMT, although oil & gas .SXEP, banking .SX7P and automakers .SXAP index were a drag.

Royal Dutch Shell (RDSa.L) fell 1.0% after saying it would write down the value of its assets by up to $22 billion after lowering its long-term outlook on oil and gas prices.

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