Tech lifts European shares as currency weakens; autos up

By Danilo Masoni

MILAN (Reuters) - European shares hit a one-month high on Wednesday supported by currency weakness and a rally in tech stocks following well-received earning updates and a record close for the Nasdaq.

The tech index rose 2.1 percent with Ericsson up 9 percent after the mobile telecom equipment maker unexpectedly swung to a modest operating profit, while semiconductor bellwether ASML rose 5.3 percent on forecast-beating results.

Their gains and a positive assessment of the U.S economy from Federal Reserve Chairman Jerome Powell on Tuesday drove the pan-European STOXX 600 benchmark index upward for a second day, putting it 0.4 higher by 0858 GMT.

The upbeat remarks from Powell, who will continue his testimony to Congress on Wednesday, lifted the dollar, which in turn helped shares in Europe's export-oriented sectors rise.

"Another bullish update with Powell once again talking up the strength of the US economy could see the dollar extend its gains from Tuesday's session," said Jasper Lawler, head of research at London Capital Group.

Auto stocks, which rely heavily on exports for growth and have been penalised by concerns the United States could introduce higher import tariffs, were among the best performers.

Traders said the sector was also supported by reports that European Commission President Jean-Claude Juncker will visit U.S. President Donald Trump in Washington on July 25 to discuss strained trade ties.

European automakers send around $50 billion worth of cars to the United States and Trump has repeatedly threatened to raise tariffs on car imports from Europe.

Shares in BMW, which is the most exposed with up to one fifth of its global sales heading to the United States, rose 1 percent.

Britain's FTSE rose 0.5 percent as the pound was further weakened by worries about Prime Minister Theresa May's ability to push through her Brexit plans.

Elsewhere, banks fell 0.6 percent, dragged by a drop of 8 percent in Danske Bank after the Danish lender's second-quarter pretax profit fell short of expectations.

Among top gainers was Novartis, which rose 2 percent following its earnings update. The Swiss heavyweight drugmaker said it was on track for sales and profit growth this year after posting strong second quarter results.

(Reporting by Danilo Masoni, Editing by Kit Rees)