Europe shares dip after financials sour tech rally
Semiconductor firms' shares were a bright spot yesterday in a lacklustre European market, weighed down by a fall among mining stocks and banks.
The pan-European STOXX 600 index as well as Eurozone bluechips fell 0.2pc. Britain's FTSE 100 slipped 0.3pc.
Tech stocks were among the strongest sectoral performers with Apple suppliers Dialog Semiconductor and AMS jumping 3.8pc and 4.7pc respectively after optimism on future demand for the new iPhone model lifted Apple shares to a record high overnight.
"The big movers that we see in the German market today are in technology," said David Madden, market analyst at CMC Markets UK.
The rise in tech was not enough to outweigh falls among mining firms and oil stocks, which declined on the back of weaker metals and oil prices.
Iron ore miner Rio Tinto was the biggest faller in the basic resources sector, dropping 2.3pc after it reported first half earnings.
Analysts said they were slightly behind their expectations.
The firm also announced an interim dividend and an additional $1bn share buyback.
"We were disappointed at the increased buyback - we would have preferred to see a higher dividend instead," analysts at Shore Capital Markets said in a note.
CMC Markets' Madden added that results which undershot expectations were being punished more than upbeat earnings were being rewarded.
"It's almost like investors are happy to pounce on negative news and sell negative news, but they're not as keen to go out and buy when the results are good."
Valuations are already high and running above long-term averages, suggesting that good earnings are much less a surprise than earnings disappointments.
Disappointing results from Societe Generale and Commerzbank were a drag on Eurozone banks. The sector index fell 1.2pc. Natixis jumped around 2pc, however, on the back of higher profits for the period.
Well-received earnings boosted shares in gambling firm William Hill, which rocketed more than 9pc to the top of the STOXX, while results also spurred sizeable moves in Hugo Boss and Lufthansa.
Around halfway through the results season, second quarter earnings in Europe are expected to increase 13.4pc year on year, or 11.2pc excluding the energy sector.
Asian technology stocks hit 17-year peaks.
Shares in Apple surged 6pc after-hours to a record of more than $159 each, taking its market capitalisation above $830bn. (Reuters)