Europe open: Stocks gain, despite woes in chip space

European stocks are moving higher, despite a spate of warnings out of the chip sector, tracking the fresh gains made overnight on Wall Street and helped by slightly better-than-expected data on the Continent.

Nonetheless, analysts and economists were quite downbeat when it came to the latter.

Commenting on data released earlier in Europe, Chris Williamson, IHS Markit's chief business economist, said: "The deteriorating picture looks broad-based. Italy is in its steepest downturn for over five years and France has sunk into its sharpest decline for over four years. Faster growth in Germany and Spain meanwhile looks tenuous, as order book trends deteriorated in both cases."

He was speaking following the release of a small upwards revision to the survey compiler's Eurozone services sector gauge for January from .

As of 0923 GMT, the benchmark Stoxx 600 was up by 0.71% or 2.54 points to 362.46, alongside an advance of 0.88% or 98.06 points to 11,274.64 for the German Dax and an advance of 0.78% or 39.15 points to 5,039.42 for the French Cac-40.

The FTSE Mibtel meanwhile was ahead by 0.96% or 187.85 points to 19,792.24.

From a sector standpoint, the Stoxx 600's Oil&Gas sector gauge was 1.69% higher to 329.70, while the Technology sector index was up by 0.73% to 424.71.

Euro/dollar meanwhile was drifting lower by 0.13% to 1.4205.

In the corporate space, Infineon cut its budget for capital outlays in 2019 from a range of €1.6bn to €1.7bn to approximately €1.5bn.

But after a dip at the opening bell, the German semiconductor manufacturer's stock price had moved back into the green and was climbing by almost 1%.

Shares of Austrian chipmaker AMS on the other hand were down by 13% after guiding towards first quarter sales of between $350m to $390m, which was comfortably below analysts' estimates.

The company, which makes sensors for the likes of Apple, cited less favourable end markets, subdued demand for smartphones and the sluggishness typically associated with every first quarter.

It also put on hold plans for a secondary listing in Hong Kong and suspended its cash dividend.

On the economic front, IHS Markit's services sector Purchasing Managers' Index for December was revised higher from a preliminary print of 50.8 to 51.2 (consensus: 50.8) and its so-called composite PMI, for both the factory and services sectors, from 50.7 to 51.0 (consensus: 50.7).

The main factor behind the mark-up was the revision carried out to the French PMI from 47.5 to 47.8.

"Overall, growth in new business and production has slowed sharply in the Eurozone as a whole," said Pantheon Macroeconomics's chief Eurozone economist, Claus Vistesen.

"Indeed, in manufacturing firms are now having to eat into work backlogs to sustain production amid falling new orders. Employment growth remained positive, but it is now slowing, and falling outright in Italy, sending a clear signal that the slowdown is now beginning to eat into firms’ demand for labour."