3 Min Read
* STOXX 600 up 0.6 pct
* Acquisition talk sends Hexagon flying
* Tech stocks reboot, supporting gains
* Raiffeisen Bank falls as Barclays calls underweight (ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)
By Helen Reid
LONDON, June 14 (Reuters) - Recovering technology stocks gave European shares another leg up on Wednesday, while deal chatter sent Sweden's Hexagon soaring to a record high.
The pan-European STOXX 600 benchmark and its euro zone counterpart rose 0.6 to 0.7 percent, in line with blue-chips, with broad investor focus on the U.S. Fed rate decision later in the day in which the bank is widely expected to raise rates.
They climbed to a session high after Euro zone industrial output data showed healthy economic growth, and employment hit a record high.
In Britain the FTSE 100 rose 0.5 percent while midcaps rose 0.8 percent.
Hexagon stole the limelight, jumping more than 16 percent to a new record high after a Wall Street Journal report that the Swedish measurement technology firm was in talks for a potential sale to undisclosed buyers.
Hexagon said in a statement that the market would be immediately informed should evaluations lead to concrete results.
Technology stocks were the best-performing for the second session running, up 1.3 percent and clawing back after a nosedive fueled by jitters over valuations, particularly in the U.S.
Chipmakers Infineon, Dialog Semiconductor and ASML all gained 1.2 to 1.5 percent.
Tech sector aside, the trend of outperformance of defensives relative to cyclical sectors continued, with utilities among the best-performing sectors while banks made timid gains and autos were in the red.
"We expect the dominant market narrative over the coming months to be the fade in Euro area PMI momentum," said Deutsche Bank European equity strategist Sebastien Raedler.
"We remain underweight European cyclicals versus defensives, which have underperformed by 4 percent since early May, as Euro area macro surprises have started to roll over."
British housebuilder Bellway gained ground after its trading update showed robust demand for homes did not slow ahead of the national election on June 8.
The builder's upbeat tone also lifted peers Barratt Development and Taylor Wimpey.
Meanwhile, a changing of the guard at French utility EDF boosted it by 4.3 percent. EDF appointed an Italian to run its British unit handling the construction of two nuclear reactors at Hinkley Point C.
Elsewhere, broker updates propelled share prices.
Austria's Raiffeisen Bank sank to the bottom of the European index after Barclays cut the stock to an "underweight", saying it is relatively expensive and less geared to rising rates than its peer Erste bank.
"We believe that Raiffeisen's stock has run too far on its restructuring and earnings recovery, and that its higher risk business profile makes its earnings outlook volatile," said Barclays analyst Victor Galliano.
Reporting by Helen Reid; Editing by Tom Heneghan