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Tech supports STOXX 600, utilities drag

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CTS Eventim shares hit record high as Q1 core profit jumps

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Embracer slides as CFO to step down

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EZ May business growth at year high, PMI shows

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Key euro zone wage indicator picks up in Q1

(Updated at 1605 GMT)

By Sruthi Shankar and Johann M Cherian

May 23 (Reuters) - European stocks closed flat on

Thursday as signs of improving economic activity prompted

investors to scale back expectations for interest rate cuts this

year and tempered optimism around strong forecasts from AI

darling Nvidia ( NVDA ).

The pan-European STOXX 600 index came off session

highs to close not far from unchanged.

The tech index rose 1.1%, with semiconductor stocks

including ASML, Infineon and ASM

up in the range of 1% to 2.6% after Nvidia ( NVDA ) forecast

quarterly revenue above estimates, announced a stock split and

raised its quarterly dividend by 150% on a post-split basis.

Speaking on the European tech performance on the day,

Mark Preskett, senior investment consultant and portfolio

manager at Morningstar said, "these are key players in the

semiconductor production and equipment cycle and it looks like

the picks and shovels approach of investing is bearing fruit."

A surge in technology stocks around the prospects for

artificial intelligence and hopes of imminent interest rate

reductions by the European Central Bank had boosted the STOXX

index since late 2023, and it is trading just shy of its

all-time high.

However, risky assets came under pressure as yields on

European bonds rose after a preliminary survey showed euro zone

business activity expanded at its fastest pace in a year in May.

Separately, closely watched

negotiated pay growth picked up

slightly in the first quarter, bolstering the case for

caution in cutting interest rates from record highs.

Traders are pricing in rate cuts of 58 basis points

(bps) by the end of 2024, compared with 67 bps on Wednesday.

"Wage inflation is a lagging indicator ... we're seeing

quite a lot of volatility around the data, but in aggregate

inflation surprises are relatively muted," Preskett added.

Rate-sensitive sectors such as utilities and real

estate were the biggest laggards, with Britain's

National Grid tumbling nearly 11% after it announced

plans to raise about 7 billion pounds ($8.9 billion) through a

fully underwritten rights issue.

UK's FTSE 100 ended 0.4% lower after Prime Minister

Rishi Sunak on Wednesday called a general election for July 4.

Shares of Embracer slid 8.7% after the Swedish

games developer said its finance chief would step down for

personal reasons, and also reported fourth-quarter operating

profit in line with market expectations.

Swiss bank Julius Baer rose 3.2% as its assets

under management rose 10% to 471 billion Swiss francs ($515

billion) in the first four months of the year.

Ticketing firm CTS Eventim reported a

36% jump in first quarter adjusted core profit

, boosted by rising demand for music and sports events and

online ticket sales, sending its shares up 4.8%.