European shares up as robust U.S. data soothes recession jitters, chip stocks rally

European share market news: European shares climbed on Wednesday after robust U.S. data overnight soothed concerns about a steep economic slowdown, even as ECB President Christine Lagarde warned that the central bank was still not seeing enough evidence of an inflation cool-down.

The pan-European STOXX 600 index (.STOXX) closed 0.7 per cent higher, tracking overnight gains in Wall Street. Leaders of the world's top central banks reaffirmed on Wednesday they see further policy tightening as needed to tame stubbornly high inflation, but still believe they can achieve that without triggering outright recessions. U.S. Federal Reserve Chairman Jerome Powell did not rule out further hikes at consecutive Fed meetings, while the ECB's Lagarde confirmed expectations the bank would raise rates in July, saying such a move was "likely".

"It is priced in... investors have taken the lay of the land and put themselves in the position to deal with what's expected," said Danni Hewson, head of financial analysis at AJ Bell. Shares of Sage Group Plc (SGE.L) gained 5.1 per cent to a 23-year high after J.P. Morgan upgraded its rating on the stock to "overweight" from "neutral".

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Shares of chip equipment maker ASML Holding (ASML.AS) rose 2.3 per cent while Nordic Semiconductor (NOD.OL) jumped 6.4 per cent, making technology (.SX8P) among the top European sectoral gainers. Semiconductor shares were in focus after a report stated the U.S. was considering new restrictions on exports of artificial intelligence chips to China.

"There is a thought that although a lot of European tech stocks and semiconductor stocks get dragged into this because of the U.S. rules, there is a little wiggle room," said Hewson. Also boosting the STOXX 600, Roche Holding (ROG.S) gained 1.5 per cent after the U.S. health regulator declined to approve Regeneron's (REGN.O) Eylea drug.

French supermarket chain Carrefour (CARR.PA) gained 3.0 per cent after Morgan Stanley initiated coverage with an "overweight" rating. Ocado (OCDO.L) shed 5.0 per cent, with traders attributing the drop to a media report that Amazon (AMZN.O) had denied speculation it would make a bid for the British online supermarket.

UBS (UBSG.S) is weighing cutting tens of thousands of jobs following its emergency takeover of Credit Suisse, according to a person familiar with the discussions. Shares of the Swiss bank climbed 1.1 per cent. German business software maker SAP (SAPG.DE) added 2.2 per cent after Chief Executive Officer Christian Klein told the business daily Handelsblatt he sees huge growth potential in generative AI technology.

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