European stocks recorded their first weekly advance in three amid optimism that companies such as Nokia Oyj and Royal Philips Electronics NV will benefit from a pickup in demand.
Munich Re and Allianz AG paced gains yesterday after a US Senate panel approved legislation for creating a US$108 billion fund to compensate asbestos victims, a bill that would limit liability of insurance companies.
The Dow Jones Stoxx 50 Index advanced 1.3 percent to 2429.83 yesterday in London, extending this week's gain to 1.6 percent.
The Stoxx 600 climbed 1.2 percent to 206.65, for a five-day increase of 1.7 percent. The technology group, which includes Nokia, led gains since last Friday, adding 6.2 percent.
"Investors have been shifting to technology stocks because that's where they expect the good results to come from," said Emanuele Vigano, who helps manage US$793 million at Bipielle Fondicri Sgr SpA in Milan.
Nokia, the world's biggest maker of mobile phones, jumped 11 percent in the past five sessions. The stock slipped for the first day in five yesterday, losing 1.2 percent to 15.70 euros.
Lehman Brothers Holdings Inc on Wednesday said that total sales of mobile phones in Europe climbed 14 percent in June from a year earlier, driven by demand for color screens and cameras.
Handset demand rose 10 percent in June from May, Lehman said, citing a survey by Martin Hamblin GfK, a research company.
Earnings
Nokia is scheduled to report second-quarter results on July 17. The Espoo, Finland-based company will probably say profit fell 30 percent to 601 million euros (US$680 million) on costs for job cuts, according to 11 analysts surveyed by Bloomberg News.
Philips, Europe's largest maker of consumer electronics, gained 9.3 percent to 18.14 euros in the week. The Dutch company, which reports results Tuesday, probably narrowed its second-quarter net loss to 86.5 million euros from 1.36 billion a year earlier, according to the average estimate from 15 analysts. The Stoxx 600 cyclical index, to which Philips belongs, has advanced 2.7 percent since last Friday.
Fifteen of the 17 Western European benchmark indexes rose yesterday. Germany's DAX advanced 1.7 percent, the UK's FTSE 100 Index increased 0.7 percent. France's CAC 40 climbed 1.3 percent.
September futures on the Dow Jones Euro Stoxx 50 Index of companies based in the 12 countries sharing the euro climbed 1.6 percent to 2476. The index gained 1.5 percent to 2477.72.
Insurers gain
In the US, a Senate committee voted to send the asbestos bill to the House. It would end lawsuits that have bankrupted more than 60 US companies.
Munich Re, the world's biggest reinsurer by premiums, gained 4.5 percent to 92.99 euros. Munich Re has pumped US$2 billion into its American Re unit in July of last year, partly to cover asbestos claims.
Allianz, Europe's largest insurance company, rose 3.4 percent to 77.05 euros. Last year, it injected US$750 million into its US Fireman's Fund Insurance Co unit to cover asbestos-related demands.
"The US Senate's decision is being received well by the market and will help lift shares of the companies that are most involved," said Manlio Bonafede, who helps manage the equivalent of US$1.7 billion at Banca Leonardo SpA in Milan.
The Stoxx 600 insurance group led the advance, rising 2.7 percent.
Settlement Plan ABB Ltd, Europe's biggest engineering company, jumped 4 percent to 4.67 Swiss francs after a US bankruptcy court approved its proposed US$1.3 billion settlement plan for asbestos-related claims.
Judge Judy Fitzgerald this week backed ABB's plan to settle 130,000 lawsuits stemming from boilers made by its Combustion Engineering Inc unit. A US District Court judge must approve the settlement, which may also be appealed.
ABB chief executive officer Juergen Dormann has said settling the lawsuits will speed the sale of its oil-equipment unit, which faces 8,000 asbestos claims. The business may fetch as much as US$1.5 billion as the company seeks to cut its US$8.2 billion of debt.
Renault SA, France's second-largest carmaker, added 2.7 percent to 48.29 euros, for an increase of 1.6 percent this week.
The company, along with Toyota Motor Corp, the world's third-biggest, led a 2.9 percent gain in June auto sales in Western Europe, boosted by the introduction of new models and incentives.
Renault's new Megane Scenic models won customers in France.
"Renault's performance shows how critically important it is to bring out new models in this extremely competitive environment," said Arndt Ellinghorst, an analyst at WestLB, who has a neutral rating on Renault.
Auto sales advanced to 1.32 million vehicles from a year earlier, according to the Brussels-based European Automobile Manufacturers Association, ACEA. It's the first rise since March.
Luxury goods
LVMH Moet Hennessy Louis Vuitton SA, the world's largest luxury-goods maker, rose 4 percent to 46.70 euros, bringing this week's gain to 5.9 percent, after Gucci Group NV CEO Domenico De Sole said demand for luxury goods revived in the past two months as shoppers in Asia returned to stores.
"We see a dramatic improvement in retail operations in May and most importantly in the month of June," he said in a televised interview. Pinault-Printemps-Redoute SA, the French department-store operator that owns 63 percent of Gucci, added 2.8 percent to 65.9 euros.
It's up 4.4 percent for the week.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts