Danske Bank notes European equities were broadly flat on Monday, with the Stoxx 600 unchanged and OMX Nordic slightly higher, while Asian markets rallied in thin trading as US markets were closed for Labor Day. The bank highlights strong performance in technology, particularly semi-conductors and AI-linked hardware, while rising bond yields weighed on real estate and other rate-sensitive sectors.

Tech strength offsets rate headwinds

“European equities were little changed on Monday, while Asian markets rallied sharply, but in thin trading as US markets were closed for Labor Day.”

“The Stoxx 600 finished flat and OMX Nordic gained 0.4%. Tech led performance, with semi-conductors and AI-linked hardware at the forefront, ignited by ChatGPT’s launch of its new Astra model on Friday. “

“Astra is designed to handle more complex reasoning tasks, which also increases the need for compute power, memory capacity and GPU intensity. Astra challenges that narrative.”

“The market reaction reflected this yesterday. Korean equities rallied 5% and another 2% this morning. European technology stocks also performed well, although gains elsewhere were constrained by another rise in bond yields.”

“Real estate and other rate-sensitive sectors lagged. US equity futures are broadly unchanged this morning.”