Technical data

Bounce in hard-hit tech companies pushes European stocks up

The DAX chart of the German stock index is pictured on the stock exchange in Frankfurt, Germany on January 10, 2022. REUTERS / Staff

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Jan. 11 (Reuters) – European stocks surged on Tuesday as investors returned to tech stocks after a seven-day rout in the sector fueled by concerns about the rate hike, while a batch of bullish earnings also rose contributed to the ambiance.

The pan-European STOXX 600 (.STOXX) index rose 1.1% after a late-session rally on Wall Street that supported Asian stocks.

The European tech index (.SX8P) was up 2.4%, with nearly all stocks trading in positive territory, after falling 3.6% to a nearly three-month low in the previous session.

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“The intraday Nasdaq rebound provides some near-term support, but investor positioning in the tech sector is still very high, so there is even more underperformance to come,” said Graham Secker, chief strategist. Morgan Stanley European equities.

European stock markets are well out of the records set earlier this month as rising yields, inflationary pressures and COVID-19 cases increase pressure on equities and investors seek clues of tightening policies.

The European Central Bank (ECB) does not see eurozone inflation above its 2% medium-term target, chief economist Philip Lane said in an interview.

Morgan Stanley’s Secker said he doesn’t expect the ECB to hike rates in the next 12 months, but a shift in the global discourse towards faster tightening could put pressure on the central bank and actions of the region.

“But it will be another good season of results, which will support the market,” he added.

Profits of companies listed on the STOXX 600 are expected to jump 49.3% in the fourth quarter to 109.1 billion euros ($ 123.7 billion) from the previous year, according to data from Refinitiv.

Germany’s Delivery Hero SE (DHER.DE) jumped 5.6% on Tuesday after saying it expects its food delivery business to break even in the second half of 2022 because demand has skyrocketed since the start of the pandemic. Read more

HelloFresh (HFGG.DE) gained 3.3% after the German meal kit delivery company announced a € 250 million share buyback.

Construction chemicals maker Sika AG (SIKA.S) grew 3.4% after posting a 17.3% increase in sales in 2021, boosted by acquisitions and a recovery in the construction industry. building. Read more

Telecommunications equipment maker Nokia (NOKIA.HE) rose 2.6% after saying it expected to exceed its profit forecast for 2021. Read more

Meanwhile, Deutsche Bank (DBKGn.DE) lost 1.5% after US financial investor Cerberus, which promoted a merger of the bank and Commerzbank (CBKG.DE), divested much of its holdings in the two main German lenders. Read more

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Reporting by Anisha Sircar in Bangalore; Editing by Subhranshu Sahu and Aditya Soni

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