By Aude Lagorce, MarketWatch
LONDON (MarketWatch) — European markets edged higher Tuesday, helped by a rally in technology shares on the back of the Texas Instruments Inc. deal for National Semiconductor Corp.
The Stoxx Europe 600 index spent most of the session around the unchanged mark but finished up 0.2% at 280.9. The benchmark advanced 0.1% on Monday as several deals were announced.
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Still, Bernard McAlinden, strategist at NCB Stockbrokers, said he was a bit surprised European markets didn’t get more of a lift from Texas Instruments’ /zigman2/quotes/202237907/composite TXN -0.19% purchase, announced late Monday, of arch rival National Semiconductor for $6.5 billion in cash. Read about TI’s deal for National Semiconductor.
“We have had a string of deals over the past few days and it’s getting harder to impress the markets,” he said.
Sentiment in Europe has been muted over the past few sessions. It is kept in check by expectations of an interest-rate hike by the European Central Bank on Thursday as well as the start of a new earnings season, where commodity-price increases may have had a bigger impact in some sectors, McAlinden said.
Tech sector rallies
The technology sector was a top positive contributor in Europe.
Shares of German chip maker Infineon Technologies AG /zigman2/quotes/204995926/delayed DE:IFX +0.94% rose 3.9% and STMicroelectronics N.V. /zigman2/quotes/203551318/delayed IT:STM +1.71% advanced 2.9%, while British microchip designer ARM Holdings PLC gained 2.6%.
“We expect the Texas Instruments-National Semi transaction to be only the beginning, with more deals ahead,” Cheuvreux analysts wrote in a note to clients. “Most semiconductor vendors are flush with cash while facing well utilized, sometimes even tight capacity.”
The broker said the likes of STMicroelectronics and Infineon are likely to play the role of consolidators, targeting smaller vendors such as Dialog Semiconductor /zigman2/quotes/203017921/delayed DE:DLG +3.32% , Micronas Semiconductor Holding , Elmos Semiconductor AG /zigman2/quotes/204127742/delayed DE:ELG -0.47% , CSR PLC , Nordic Semiconductor ASA /zigman2/quotes/206653118/delayed NO:NOD -0.73% and Wolfson Microelectronics PLC .
Wolfson surged 5.1%, Nordic was up 2.8% and CSR gained 3.1%.
On the downside, the telecommunications sector was weighing on the Stoxx 600.
Shares of Belgian mobile operator Mobistar SA declined 1.8% after Credit Suisse cut its rating on the stock to underperform from neutral. TeliaSonera AB , which was also downgraded to underperform, dropped 1.1% and shares of Vodafone Group PLC /zigman2/quotes/202484985/delayed UK:VOD -0.88% /zigman2/quotes/202862751/composite VOD -1.34% slipped 1.5%, extending modest losses posted Monday when the firm announced it had sold its stake in French mobile operator SFR to Vivendi SA /zigman2/quotes/202179234/delayed FR:VIV +0.08% .
In France, the CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 -0.23% finished roughly unchanged at 4,041.74. The top decliner was utility Electricite de France SA /zigman2/quotes/201783867/delayed FR:EDF -0.61% , which lost 3.7% as the French government announced a deceleration in planned electricity-tariff increases to help mitigate the impact of higher energy costs on French households. Shares of GDF Suez SA fell 1.9%