* STOXX 600 down 3.9% in Jan
* Tech stocks mark worst month since 2008
* Saipem slumps after 2021 profit warning
(Updates to market close)
By Anisha Sircar and Ambar Warrick
Jan 31 (Reuters) - European shares ended higher on Monday as
tech stocks jumped from eight-month lows, although concerns over
policy tightening, inflation and geopolitical tensions saw the
STOXX 600 mark its worst month since late-2020.
The pan-European STOXX 600 rose 0.7%, with tech
stocks up 3.5%. But the index lost 3.9% in January.
Technology stocks fell 12% in January, their worst month
since the height of the 2008 financial crisis, as investors
discounted future earnings from the sector on expectations of
higher lending rates.
"Investors will continue to grapple with higher rate
expectations and geopolitical risks on one side, set against
robust macroeconomic and corporate fundamentals on the other -
as a result, volatile trading looks set to continue," said Mark
Haefele, chief investment officer at UBS Global Wealth
Management.
However, "the sharp fall in many high-quality tech firms is
already creating opportunities for longer-term investors to add
exposure," Haefele said.
Concerns over gas supplies to western Europe persisted as
Britain warned it was "highly likely" that Russia was looking to
invade Ukraine and the head of NATO said the continent needed to
diversify its energy supplies.
Rising oil prices saw energy stocks largely outpace
their European peers in January, rising 8.6%. Higher bond yields
also supported banks, which added 7.4%.
The focus will be on the European Central Bank and the Bank
of England meetings on Thursday, which are expected to offer
clues to their policy paths after the U.S. Federal Reserve's
hawkish tone last week led to gyrations across markets.
No immediate policy action is expected since the ECB in
December laid out plans to wind up its 1.85 trillion euro ($2.09
trillion) pandemic stimulus scheme by end-March, but price
pressures remain strong and the markets are keen for a sense of
whether the ECB is getting closer to a more hawkish stance.
Meanwhile, the markets expect a 50 basis-point rate increase
from the Bank of England, its second hike in a row.
Vodafone gained 1.9% after saying it would work with
Intel and other silicon vendors on designing its own
chip architecture to drive innovation and efficiency in nascent
OpenRAN network technology.
KPN, the largest telecom provider in the
Netherlands, added 1.0% after announcing a share buyback
programme and a higher dividend over 2022.
Italian energy services group Saipem plunged 30.2%
after issuing a profit warning on deteriorating margins due to
the pandemic and higher raw material costs.
(Reporting by Anisha Sircar in Bengaluru; Editing by Subhranshu
Sahu and Barbara Lewis)
Vodafone (VOD)
