UPDATE 1-European shares recover as Middle East tensions wane; tech stocks shine

European shares rebounded on Tuesday, snapping a two-day losing streak as concerns over a U.S.-Iran standoff eased, while technology stocks tracked their Wall Street peers higher. A global equity selloff following the killing of a top Iranian general by the United States last week slowed down on Monday in the absence of any fresh escalation by the two countries.

The pan European STOXX 600 Index rose about 0.6% by 0911 GMT, with German stocks outperforming most peers. Chipmaker Infineon Technologies AG rose 3.6% and was the biggest gainer on the DAX.

"The flare-up in geopolitical uncertainty marks an unwelcome start to the New Year for investors, but previous periods of heightened tensions suggest the impact on wider markets tends to be short-lived," brokerage UBS wrote in a note. Broader technology stocks were the best performers for the day, with the regional subindex adding about 1.4%. U.S. technology stocks had reversed course late during Monday's session to close higher.

The automobile subindex was also among the best performing sectors, after British carmaker Rolls-Royce marked a 25% jump in 2019 sales, giving some comfort to the sector that has been plagued by slowing global demand. Shares of Rolls-Royce owner BMW rose by nearly 1%.

On the other hand, luxury British carmaker Aston Martin plunged about 13% after it warned its annual core profit would plummet more than 45% from last year, citing weak demand in Europe. The stock was the biggest loser on the UK's FTSE 250 index.

Oil and gas stocks saw a slight retraction after a rally in oil prices, which had prompted strong gains over the last two sessions, ran out of steam. Markets were awaiting December inflation data from the eurozone, which is expected to have accelerated slightly from November's pace, according to a Reuters poll.

November retail sales data from the bloc is also due later in the day, with markets watching for a recovery in the reading after a sharp fall in October. Data on Monday showed that service-sector activity was still propping up business growth in the bloc, while the manufacturing sector continued to underperform.

 

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)