PARIS (Reuters) – European markets ended higher on Wednesday, supported by technology despite higher-than-expected inflation figures and as the next U.S. Federal Reserve meeting looms.

In Paris, the CAC 40 gained 0.76% to 7,531.49 points, while the German Dax advanced by 0.48% and the British Footsie by 1.13%.

The EuroStoxx 50 index ended the session up 0.68%, compared to 0.8% for the FTSEurofirst 300 and 0.79% for the Stoxx 600.

Reuters reported on Wednesday that ASML could be exempt from new U.S. rules on semiconductor exports to China, sending shares higher.

The semiconductor sector also benefited from the good outlook for Advanced Micro Device, which sees a higher contribution from artificial intelligence chips to revenue this year.

The results also pushed the indices higher, with figures from HSBC, L’Oréal, Airbus and Danone being well received by investors.

Slightly higher than expected inflation figures in the eurozone, however, did not limit risk appetite.

There is still more than a month to go before the next meeting of the European Central Bank (ECB) and many new data could encourage the central bank to lower its rates in September, as the markets expect.

“A higher-than-expected result last month did not lead to a particularly hawkish bias at the July meeting. Ms. Lagarde had instead expressed confidence in the moderation of wage growth,” recalls Christophe Boucher, chief investment officer at ABN AMRO Investment Solutions.

Investors’ attention will turn after the close, in Europe, to the Fed meeting.

The central bank is expected to keep rates at current levels and delay any details on the future path of rates until its Jackson Hole meeting in late August.

“We believe that the progress made on inflation since April and the rebalancing in the labor market will allow Fed Chairman Jerome Powell to pave the way for an easing of U.S. monetary policy, but that more signs of disinflation are still needed,” summarizes François Rimeu, senior strategist at Crédit Mutuel Asset Management.

A WALL STREET

Wall Street is moving higher at mid-session, supported by technology stocks as the next Federal Reserve meeting looms.

At the time of closing in Europe, trading on the New York Stock Exchange indicated a rise of 0.57% for the Dow Jones, against 1.7% for the Standard & Poor’s 500, and 2.51% for the Nasdaq Composite.

VALUES

In Europe, the technology sector rose 2.62%, the best performance of the Stoxx 600 sectors. AMSL gained 5.54%, ASM International 4.95%.

Euroapi reported a 9.6% drop in its turnover for the first half of the year on Tuesday, but confirmed its outlook for 2024, increasing by 11.64%.

Danone said on Wednesday that it beat expectations for second-quarter like-for-like sales, with revenue rising 4.0 percent to 6.94 billion euros, up 2.35 percent.

Airbus reported a smaller-than-expected drop in second-quarter operating profit on Tuesday, rising 4.94 percent.

Safran reported on Wednesday an increase in current operating income in the first half, but mentioned “certain pressure” on its cash flow and fell 1.27%.

Legrand reported better-than-expected organic sales on Wednesday, gaining 6.06%.

L’Oréal, with a 5.3% increase in its sales at constant scope in the second quarter, rose by 2.49%.

Teleperformance soared 8.94% after reporting strong half-year results on Tuesday, with the group’s comments on its artificial intelligence (AI) plans also reassuring investors.

Siemens Healthineers reported third-quarter revenue and profit that missed expectations on Wednesday, falling 6.33%.

HSBC on Wednesday agreed to buy back $3 billion of shares after posting a flat but better-than-expected half-year profit, closing up 3.96 percent.

RATE

Yields are falling in the United States, as the latest employment indicators suggest that labor markets are slowing across the Atlantic, which could prompt the Fed to cut rates sooner than expected. The central bank’s meeting also encourages caution.

At the close of the rate markets in Europe, the yield on the ten-year Treasury lost 3.8 basis points (bps) to 4.1027%, compared to 1 bps for the two-year rate, at 4.3522%.

The yield on the German ten-year fell by 3.8 bp to 2.303%, while that of the two-year rate lost 2.4 bp to 2.533%.

CHANGES

The dollar is falling sharply as traders position themselves for an accommodative monetary policy meeting.

The dollar fell 0.37% against a basket of benchmark currencies, while the euro gained 0.1% to $1.0826. The pound rose 0.06% to $1.2842.

OIL

Oil prices are rising sharply as investors worry that rising tensions in the Middle East could constrain oil supplies.

Brent strengthened by 2.49% to 80.59 dollars per barrel, American light crude (West Texas Intermediate, WTI) increased by 3.1% to 77.05 dollars.

(Written by Corentin Chappron, edited by Kate Entringer)

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