European shares close higher on tech boost

The pan-European STOXX 600 was up 0.31% to 563.83 points at close after the index logged its sharpest weekly drop since late July on Friday

European shares closed higher on Monday, boosted by technology-focused stocks, while investors also focused on progress in the Ukraine peace plan.

The pan-European STOXX 600 was up 0.31% to 563.83 points at close after the index logged its sharpest weekly drop since late July on Friday.

The upbeat momentum was also affected by U.S. stock market following dovish comments from central bank policymaker John Williams on Friday, signalling that interest rates could fall “in the near term”.

This bolstered the likelihood of a cut at the central bank’s December meeting, even as several bank officials remain divided over the policy outlook amid limited clarity on the health of the U.S. economy.

We do have this optimism after just one person at the Fed mentioned the idea of near-term rate cuts, and we see the positive impact of that in the U.S. markets, and that’s echoing positively across European markets as well, Ipek Ozkardeskaya, senior market analyst at Swissquote Bank, said.

In STOXX 600, the region-wide technology index provided the biggest boost, up 1.4% after a sharp decline in the prior session, with AI-related companies leading gains.

Chip equipment maker ASML climbed 3.1% and chipmaker Infineon gained 3%, while Siemens Energy – which supplies heavyweight energy infrastructure for chip manufacturing – jumped 5.5% after Friday’s 10.1% decline.

Travel and Leisure and Basic Resources added nearly 1.9% each, while the construction and materials sector rose 1.5%.

European auto stocks added 1%. Goldman Sachs sees premium European carmakers as the most undervalued. The broker initiated coverage on Mercedes and BMW with “buy”, taking their shares up 0.8% and 2.3%, respectively. It started Stellantis, up 3.4%, with “neutral”.