EUROPE MARKETS: Chip Makers Lead European Stocks Higher After AMS Reports 252% Jump In Revenue

By FeaturesDow Jones Newswires

Euro falls back after last week's 1.7% rally

European stocks pushed into positive territory on Monday, with shares of chip makers posting the biggest gains after Apple-supplier AMS AG reported a major jump in revenue and lifted its sales forecasts.

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Exporters were likely also getting a lift from a pullback in the euro after the shared currency's rally last week.

What are markets doing?

The Stoxx Europe 600 index rose 0.1% to 400.75, adding to a 0.5% gain from Friday.

Germany's DAX 30 index put on 0.2% to 13,366.44, while France's CAC 40 index gained 0.1% to 5,534.98. The U.K.'s FTSE 100 index picked up 0.2% to 7,682.30 (http://www.marketwatch.com/story/uk-stocks-rise-for-2nd-day-boosted-by-copper-rally-and-pound-pullback-2018-01-29).

The euro dropped to $1.2396 from $1.2427 late Friday in New York, while the pound pulled back to $1.4102 from $1.4160. Both currencies rallied last week, as the dollar suffered a significant setback after U.S. Treasury Secretary Steven Mnuchin said a weaker greenback is good for U.S. trade.

Read:Here's why a weak dollar is Mario Draghi's problem (http://www.marketwatch.com/story/its-trumps-dollar-policy-but-draghis-problem-2018-01-25)

What is driving the market?

With little on the economic calendar, traders instead focused on corporate news and particularly on an update from AMS AG (AMS.EB) . The Austrian chip company said its fourth-quarter revenues soared 252% (http://www.marketwatch.com/story/shares-in-ams-jump-20-after-iphone-x-supplier-raises-outlook-2018-01-29), helping full-year 2017 revenue come in at a record EUR1.06 billion.

AMS, whose sensor technology helps power the Apple (AAPL) iPhone X's facial-recognition feature, also lifted its revenue forecast for 2016-2019 to compound annual growth of 60%. Shares surged 19%, leading the Stoxx 600.

The Stoxx Europe 600 Technology Index climbed 0.4%, making it the best performing sub-index on Monday.

Which stocks are in focus?

The gain for AMS helped power other chip makers. Shares of Dialog Semiconductor PLC (DLG.XE) were up 4.2%, STMicroelectronics NV (STM) rose 2.8% and Infineon Technologies AG (IFX.XE) climbed 1%.

Shares of Anglo American PLC (AAL.LN) gained 1.1% after the miner said it has sold the New Largo thermal-coal project (http://www.marketwatch.com/story/anglo-american-sells-new-largo-project-2018-01-29) and Old New Largo closed colliery in South Africa for 850 million rand ($71.5 million) in cash.

Shares of Sanofi SA (SAN.FR) (SAN.FR) slipped 0.3% after the French drug giant said it's buying biopharmaceutical company Ablynx NV (http://www.marketwatch.com/story/sanofi-to-acquire-ablynx-for-39-billion-2018-01-29)(ABLX.BT) for about EUR3.9 billion.

Getinge AB (GETI-B.SK) slid 6.1%. The Swedish medical technology company said full-year underlying earnings were "not satisfactory" and that it will now gradually reduce operating expenses.

What are strategists saying?

"Although U.K. and European markets have faced some currency headwinds recently, more generally global equity markets continue to hit new highs, as the fear of missing out has escalated and a tidal wave of new money combined with a surge in M&A activity has seen share prices increase sharply," said Rebecca O'Keeffe, head of investment at Interactive Investor, in a note.

"The acceleration of share price rises has caught even prominent bulls by surprise as each day adds to equity valuations and raises suggestions that the market may be entering a late-cycle surge," she added.

Check out: As Bacardi buys Patrón, here's a stock to bet on the liquor industry's high-end trend (http://www.marketwatch.com/story/as-bacardi-buys-patron-heres-a-stock-to-bet-on-the-liquor-industrys-high-end-trend-2018-01-27)

(END) Dow Jones Newswires

January 29, 2018 05:13 ET (10:13 GMT)

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