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SAP hits record high on restructuring plans
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ASML gains on Q4 earnings beat, quarterly order surge
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Technology sector index hits over two-year high
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Siemens Energy tops DAX 40 on preliminary Q1 results beat
Jan 24 (Reuters) - European shares rose over 1% on Wednesday, boosted by technology stocks after software company SAP and chip-making equipment maker ASML Holding posted strong earnings, while fresh stimulus from China's central bank further aided sentiment.
The pan-European STOXX 600 index was up 1.2%, hitting a one-week high.
Shares of Dutch company ASML Holding soared 9.7% after beating fourth-quarter earnings estimates and posting its best quarterly orders. Amsterdam's AEX index gained 2.4% to hit an over two-year high.
Shares of SAP added 7.6%, touching a record high, after the German company's 2023 operating profit beat analysts consensus and announced a restructuring plan for 2024 that will affect 8,000 roles, in a push towards artificial intelligence.
The two stocks led gains in the European technology sector, lifting the index 4.8% to its highest level in over two years.
Fourth-quarter earnings are expected to decrease 8.8% for STOXX 600 firms year-on-year, LSEG data showed, while revenues are estimated to drop around 4.5%.
Lifting risk appetite further, China's central bank said it will cut the amount of cash that banks must hold as reserves from Feb. 5, as policymakers extend efforts to shore up a fragile economic recovery.
"European markets have seen a much more positive session today, carrying over the momentum from yesterday's positive U.S. finish, but also getting a lift after China announced a 0.5% cut in the bank reserve requirement rate from 5th February," said Michael Hewson, chief market analyst at CMC Markets UK.
Shares of China-exposed luxury firms including LVMH , Kering and Richemont were up between 1.3% and 1.9%, while base and precious metal miners added 2%.
Meanwhile, a survey showed the downturn in euro zone business activity eased in January, but an improvement in the manufacturing outlook was partly offset by a steeper decline in the bloc's dominant services industry.
The data comes ahead of the European Central Bank's policy verdict on Jan. 25, where it is widely expected to hold interest rates at current levels.
Investors would, however, focus on any clues regarding the timing of interest rate cuts, with money markets pricing in around 130 basis points of cuts this year.
Among other major movers, Siemens Energy jumped 9.3% after the German energy group's preliminary first-quarter results came in better than market expectations.
The stock was the top gainer on the German DAX 40 index , with the index gaining 1.6%. (Reporting by Shristi Achar A and Shubham Batra in Bengaluru; Editing by Sherry Jacob-Phillips, Sohini Goswami and Emelia Sithole-Matarise)
