London: European shares drifted higher in early trade on Wednesday after sharp gains in the previous session, with technology stocks up following strong Apple results and airlines gaining as flights resumed.
At 2:01pm, the FTSEurofirst 300 index of top European shares was up 0.2% at 1,105.10 points after rising 1.4% on Tuesday. The index has surged 71% since hitting a record low in early March last year.
Technology stocks gained as Apple Inc’s results blew past Wall Street expectations on the back of record iPhone sales, and the company gave a strong revenue forecast, sending its shares up more than 5% to an all-time high. ARM Holdings, Ericsson, Logitech, STMicroelectronics, ASML Holding and Infineon rose 1.6 to 3.7%.
“Sentiment is getting better again following good results, but investors will keep an eye on some other important things such as U.S. jobless claims data on Thursday. If that is faltering, then the stock market will have some difficulty,” said Koen De Leus, an economist at KBC Securities.
“The stocks are climbing a wall of worries, but the wall is getting higher and higher. And my worry is that sooner or later this wall is too high to climb,” De Leus said, referring to Greece’s fiscal problems, the fraud charge against Goldman Sachs and the volcanic eruption.
Airline stocks gained after Europe’s skies were re-opened for business on Wednesday, but with so many planes having been grounded by the pall of volcanic ash spreading from Iceland it could take days, or weeks, to clear the backlog if flights.
British Airways, Lufthansa, Iberia, Ryanair, Aer Lingus and Air France-KLM, EasyJet rose 1.2 to 2.4%.
Banks were under pressure, with investors remaining cautious after the US Securities and Exchange Commission (SEC) on Friday charged Goldman with fraud over its handling of a debt product tied to subprime mortgages. Britain’s market watchdog has launched its own probe.
The STOXX Europe 600 banking index fell 0.3%, with HSBC, BNP Paribas, Societe Generale, UBS, Credit Suisse and Deutsche Bank down between 0.2 and 0.9%.
Among individual movers, global miner BHP Billiton fell 1.2%. The company has discovered potential violations of anti-graft laws relating to its exploration activities. The case is under investigation by the US markets watchdog.
Heineken NV, the world’s third-largest brewer, fell 1.3% after reporting a greater-than-expected drop in first-quarter sales, with drinkers in emerging markets failing to make up for lower volumes in Europe.