By Shashwat Chauhan and Nikhil Sharma
(Reuters) – European shares ticked up Monday as chip stocks advanced following Microsoft (NASDAQ:MSFT)’s bumper AI investment announcement, kicking off a week packed with economic data around the world including inflation readings in Europe and jobs data in the United States.
Europe’s premier index, the STOXX 600 was up 0.2% as of 0918 GMT, taking cues from an upbeat close on Wall Street on Friday. [.N]
Technology led gains amongst the major STOXX sub-sectors, adding close to 3%, with chip stocks such as ASML (AS:ASML), ASMI and STMicroelectronics at the helm of gains.
Semiconductor makers got a boost after Microsoft on Friday said it is planning to invest about $80 billion in fiscal 2025 on developing data centres to train artificial intelligence models and deploy AI and cloud-based applications.
“The demand amid U.S. big tech for AI capability is voracious at the moment, so the expectation is that demand for semiconductor chips will still be extremely strong going through 2025,” said Susannah Streeter, head of money and markets, at Hargreaves (LON:HRGV) Lansdown.
On the downside, food and beverages extended losses after Friday’s drop when the U.S. surgeon general urged cancer warnings for alcoholic drinks, with stocks falling 0.7% on the day.
The data calendar for the week was heavy with inflation readings across Europe slated to be released throughout the week, starting off with a December German inflation reading due later in the day.
On the day, data showed Germany’s service sector experienced a slight uptick last month, while a broader euro zone reading showed overall activity contracted for a second straight month.
This week’s centrepiece would be the December U.S. nonfarm payrolls report due on Friday, a crucial metric in gauging the Federal Reserve’s interest rate path for 2025.
European equities lagged their U.S. counterparts in 2024, as concerns about a slowing economy, political turmoil in Germany and France and the threat of tariffs from the incoming Donald Trump administration made for an uncertain outlook.
Among individual movers, UK’s Spectris (LON:SXS) gained 2.8% after HSBC upgraded its rating on the scientific instruments maker to “buy” from “hold”.
Rolls-Royce (OTC:RYCEY) fell 3.7% after Citigroup (NYSE:C) downgraded its rating on the British engineering company to “neutral” from “buy”, while Unilever (LON:ULVR) eased 1.8% after RBC downgraded its rating on the consumer goods group to “underperform” from “sector perform”.
Trading volumes are likely to improve this week as most market participants would return after two weeks of holiday-affected trading.