By Avinash P
Oct 13 (Reuters) - European shares rose to a one-week high on Tuesday as lower oil prices and falling bond yields lifted appetite, although disappointing results from luxury bellwether LVMH pressured the sector.
The pan-European STOXX 600 was up 0.61% at 639.54 points by 0849 GMT, to its highest since October 6. London's FTSE 100 rose about 0.8%, the biggest gainer among regional indexes, boosted by financials.
Oil prices fell as traders assessed supply risks following attacks on Saudi
Arabia and weighed the prospect of additional diesel supplies from Russia. [O/R]
Euro zone bond yields dipped alongside those of Treasuries as the selloff in tech stocks drove some slight flows to the safety of government debt. [GVD/EUR]
Higher oil prices and a global bond rout weighed on European equities in recent weeks, stoking inflation fears in the energy-importing region and dimming the appeal of riskier equities.
"European equities are caught between resilient corporate earnings and rising borrowing costs," Lauren Hyslop, investment manager at Mattioli Woods, said.
The chemicals sector climbed 1.7% to lead sectoral gains, while heavyweight banks advanced 1%.
"Banks generally like higher rates, higher yields. They can charge more on new loans; interest margins improve. That's the reason that banks have propped up the STOXX 600 rally in recent years," Hyslop said.
Technology stocks, however, capped gains, falling 0.9%, tracking a global selloff after reports of rapid tech progress by ChangXin Memory Technologies (CXMT) fuelled concerns that China is narrowing the technology gap with established rivals.
European chipmakers STMicroelectronics, Soitec and Infineon slid between 1.4% and 2.3%, while ASML dropped 1.8%.
"Technology stocks led the weakness, particularly memory-chip names, after China's CXMT announced progress on a denser DRAM design and plans to launch a new server-memory product by year-end, raising concerns over greater competition for established memory-chip producers," OCBC said in a note.
Luxury stocks fell 1%, dragged down by a 1.3% drop in LVMH.
The world's largest luxury group posted weaker-than-expected third-quarter sales, as deteriorating consumer sentiment in China weighed on demand for its Louis Vuitton and Dior brands.
Givaudan added 7.4% after the fragrance and flavour maker's third-quarter organic sales beat expectations.
Among other stocks, Nokia fell 1.7% after the Finnish telecom gear maker agreed to sell its Enterprise Campus Edge business to private equity group Aurelius.
The earnings season will pick up pace on Wednesday when ASML reports. Investors will also watch for key September data from Germany, Europe's largest economy, due later in the day.
(Reporting by Avinash P in Bengaluru; additional reporting by Johann M Cherian; Editing by Sherry Jacob-Phillips and Sonia Cheema)
