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European Markets Close Higher as Banking and Tech Stocks Rally; Greggs Up 10%

Arne Dedert | picture alliance | Getty Images
  • Skittishness in the U.S. market has been prompted by a recent jump in bond yields that has caused investors to flee highly valued tech stocks.
  • Economic data releases included French industrial output, the latest Italian GDP reading and final purchasing manager's index (PMI) data from across the euro zone.

European stocks rallied on Tuesday with regional investors brushing off losses on Wall Street earlier in the week.

The pan-European Stoxx 600 closed up 1.2%, with banks jumping 3.4% to lead gains while tech stocks added 2.1%.

The positive start for Europe comes despite concerns over losses in Wall Street in the previous trading session that saw the tech-heavy Nasdaq Composite fall more than 2%.

Tech heavyweights Apple, Alphabet, Amazon and Microsoft all fell at least 2% while shares of Facebook slipped 4.9%.

Skittishness in the U.S. market has been prompted by a recent jump in bond yields that has caused investors to flee highly valued tech stocks, as higher rates make their future profits less attractive.

By Tuesday, the major averages on Wall Street rebounded following the technology-centered market rout.

On the economic data front, final purchasing managers' index (PMI) readings from across the euro zone showed business growth dented in September by inflationary pressures and supply chain problems. The final IHS Markit composite PMI came in at 56.2 last month, compared to 59.0 in August. Anything above 50 represents an expansion.

French industrial output climbed 1% in August from the previous month, outstripping a Reuters consensus forecast of 0.3%, and accelerating from the 0.5% monthly growth seen in July.

Italy's economy grew by slightly less than previously estimated in the second quarter, according to revised figures published Tuesday by the country's national statistics office. GDP grew by 17.2% from the second quarter of 2020, fractionally below the 17.3% previously reported.

In terms of individual share price movement, British bakery chain Greggs surged 10.5% after raising its profit forecast on the back of strong sales.

"Like many businesses, Greggs now faces the harsh bite of the supply chain crises. However, the baker may have been more prepared than most competitors as it reportedly stockpiled ingredients and equipment from 2019; its early actions may have seemed extreme at the time but will now help it shake off some supply chain challenges others are facing," said Julie Palmer, partner at British professional advisory firm Begbies Traynor.

At the bottom of the Stoxx 600, Denmark's GN Store Nord fell 7% after cutting the 2021 revenue growth forecast for its hearing aid unit.

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- CNBC's Yun Li and Eustance Huang contributed reporting to this story.

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