European shares edged higher yesterday, boosted by technology and resource stocks, as tame data on US core inflation helped ease interest-rate concerns and as crude oil headed towards $72 a barrel.
British Energy slid after warning it may miss its full-year target for electricity output, while Synthes fell after its profit missed expectations.
The FTSEurofirst 300 index of top European shares closed unofficially up 0.3 per cent at 1,359.42 points, hovering at three-month highs.
The index has made up most ground lost between mid-May and mid-June when worries about higher interest rates sparked one of the biggest selling bouts in recent years. The Dow Jones technology sector led the gains yesterday, adding 2.7 per cent to trade at its highest level in almost six weeks as investors judge the sector is well positioned to benefit from healthy economic growth.
"It seems very macro-related. Yesterday people were focused on the PPI numbers and today the CPI numbers, it looks like they're taking positions in high beta stocks," said Theo Maas, technology fund manager at ABN AMRO Asset Management.
"Tech has been by far the worst performing sector over the past two years now."
Nokia rose 2.8 per cent, while SAP added 3.4 per cent and Ericsson gained 1.8 per cent.
Data yesterday showed the core US consumer price index, an inflation gauge that strips out volatile food and energy costs, rose 0.2 per cent in July - breaking a four-month string of 0.3 per cent increases. Overall, consumer prices were up 0.4 per cent in July after a 0.2 per cent gain in June.
Resource stocks gained, with BHP Billiton and Rio Tinto both climbing 3.8 per cent, while Xstrata added 3.6 per cent as base metal prices climbed.
Oil stocks languished, with BP down 1.1 per cent as crude oil traded around $72.35 after stockpiles fell inline with expectations.
British Energy helped cap sentiment as its shares fell 4.5 per cent after warning it may miss this year's output goal, despite beating forecasts with a 145 per cent profit jump.
Swiss medical-device maker Synthes saw its shares slide three per cent as its profit came in below forecasts.