European shares close near two-week highs

The pan-European STOXX 600 closed 1.5% higher at 620.29 points, with indexes in the region including Germany and France up more than 1.4% each

European shares finished near two-week highs on Wednesday, aided by defence and technology stocks, as ‌investors awaited an earnings report from U.S. chip company Nvidia, and while caution remained on Iran-U.S. standoff in the Middle East.

The pan-European STOXX 600 closed 1.5% higher at 620.29 points, with indexes in the region including Germany and France up more than 1.4% each.

​Investors are keen on AI company Nvidia’s results coming after the U.S. markets close later in the day that ​could offer clues into how demand for AI infrastructure was faring.

Reuters reported that ASML ⁠expects the booming global semiconductor market to be “tense” with tight supply as demand from AI, satellites and ​robots outpace what the industry can produce. The chip-making machine company’s shares were up 6.7%.

More broadly, European technology ​stocks climbed 2.9%, and the sector has seen the biggest gains this quarter on the STOXX 600. Semiconductor shares such as ASM International and STMicroelectronics were up 3.9% and 6% on Wednesday.

ASML has rather lagged the rally that we’ve seen in semiconductors as ​a whole. So, we think there’s scope for strong earnings momentum there, said Paul Wild, European equity ​fund manager at J O Hambro Capital Management.

I’d be a little bit more cautious in terms of some of the ‌chip ⁠companies themselves, he said, adding that valuations among EU semiconductors have surged.

Wild said AI equipment stocks such as Legrand and Schneider Electric offered better exposure to the global rally. Both stocks were up over 3%.

Still, given Europe’s small AI tech exposure, the sector’s gains have not been able to lift the STOXX 600 to record ​highs, similar to the rallies ​seen in Asia and the ⁠U.S.