LONDON (ShareCast) - Technology stocks were on the rise on Wednesday as a well-received update from chipmaker Imagination Technologies gave the sector a boost.
Imagination's shares were up 5.6% at 199.6p in afternoon trade after the company reassured investors that "progress will continue in line with its expectations" this year despite volatile currency movements.

Trading in the licensing division during the first quarter was good with "encouraging levels of activity" across all three main internet protocol (IP) product areas - multimedia, processors and communications - while royalty revenues have been in line with forecasts.

Broker Investec maintained a 'hold' rating on the stock but said that "there is a sense of a corner being turned after a torrid 18 months".

Imagination had fallen sharply over the last week in the aftermath of an underwhelming product launch from client Apple, which is thought to account for around 30% of the company's revenues.

Analysts at The Share Centre also recommended investors to 'hold' the shares, cautioning on long-term effects of increased competition in the chipmaking sector.

"However, this could be an interesting stock for the contrarian investor as Apple's new range of products could provide a boost, especially if wearable devices take off," said analyst Helal Miah.

Rival chipmaker ARM Holdings was also performing well in London, up 2.4%, while others in the sector such as Nanoco Group, Spirent Communciations and Sepura were making small gains.



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