European shares rebound as trade hopes chase tech scares

LONDON: European shares rose on Tuesday morning as hopes for a de-escalation of the Sino-U.S. tariff war chased the previous session's fears about a possible downfall of technology stocks after suppliers of Apple cut their forecasts.

The pan-European STOXX 600 gained 0.5 percent by 0950 GMT despite Wall Street's main indexes sustaining heavy losses on Monday.

Markets in Asia overnight recouped some losses after a report that China's top trade negotiator was preparing to visit the United States ahead of a meeting between the leaders of the world's two largest economies.

Europe's tech sector rose 1.2 percent after falling 3.7 percent during the previous session when in New York the Nasdaq had retreated close to three percent.

"The European markets began to rebound on Tuesday morning, managing to avoid further losses despite a tech wobble that bled from the U.S. session into the Asian overnights", wrote Connor Campbell, an analyst at Spreadex.

Possible downside pressure through political risk remains however high on traders' mind with increased nervousness on Italy's tug of war with the European Commission over its budget and the terms by which Britain will exit the European Union.

On the latter, sterling extended its gains after British cabinet office minister David Lidington said a Brexit agreement was still possible in the next 24 or 48 hours.

The telecom sector was the main gainer in Europe on Tuesday, hitting its highest level since Aug. 24 and up 1.8 percent, boosted by Vodafone's pledge to reduce operating costs.

The world's second biggest operator rose 7.1 percent and its results "eased worries of the dividend which is very attractive, currently in excess of 8%", wrote Helal Miah, an analyst at the  The Share Centre.

Telecom Italia fell 1.6 percent after the Italian phone group moved to sack Chief Executive Amos Genish, removing the man who some directors had viewed as an obstacle to their campaign for a more aggressive shake-up at the company.

The best performance was posted by medical device development and healthcare service provider BTG, which saw its shares jump 13.6 percent after announcing better-than-expected revenues and a positive outlook.

The healthcare sector was also in a positive mood with results from Bayer lifting the German group's shares by 1.2 percent and AstraZeneca up 0.8 percent after selling its U.S. rights to a treatment for infant lung infections to rare disease specialist Swedish Orphan Biovitrum for $1.5 billion.