The UK's economy is resilient enough to absorb the shock of a terrorist attack on its transportation system, economists said, a sentiment seen on Friday as markets throughout Europe shrugged off much of their losses from a day earlier.
Traders were unwinding the "safe haven" moves they had made a day earlier upon news of the explosions, said Phillip Shaw, chief economist at Investec in London.
The FTSE 100 closed 1.4 percent higher at 5,232, around its level before the blasts on Thursday. The index had closed at 5,229.6 on Wednesday. Germany's DAX was up 1.5 percent at 4,597.97, and in Paris, the CAC 40 benchmark was up 1.9 percent to 4,300.31.
"Although I think we will see more volatility today, I can't help feeling that the worst is over for now," said Tom Hougaard, chief market strategist at City Index. "We had an ugly day which will be with us forever, but the markets are intact and look defiant."
Economists pointed to the adaptability of the US and Spanish economies after the Sept. 11, 2001, terrorist attacks and the train blast in Madrid last March as encouragement for the UK. A key factor in both those recoveries was that the attacks were not followed by more.
The British pound, sent to a 19-month low on Thursday, fell even further on Friday to US$1.7310 before rebounding a bit to US$1.7342 -- still down from US$1.7425 in late New York trading a day before.
Analysts said the hit to consumer confidence would be problematic because the British economy had already been showing signs of slowing. Major retailers have reported poor sales since the end of last year and the previously buoyant housing market showed signs of heading for a slump. In the first quarter of this year, growth in the UK lagged the euro region for the first time since 2001.
Sentiment in Europe was helped by positive trade on US markets, as Wall Street rallied after a solid if unspectacular report on job growth and upbeat earnings from Alcoa, an aluminum group.
In Europe, the sharp falls on Thursday were seen by many traders as a buying opportunity.
Analysts at SG Securities in Paris advised their clients that "equity markets are cheap indeed."
"If there is no further major attack in the short-term, this event may transform itself into a buying opportunity," they said.
In Paris, the more positive mood was enhanced by the initial public offering of gas utility GDF, which closed 22.84 percent higher at 28.50 euro.
The part privatization of the group, which saw the French government sell a 20 percent stake, was almost 30 times oversubscribed.
In London, many of the leisure and travel stocks hardest hit yesterday bounced back immediately.
Interest in oil stocks was also strong following the rebound in crude prices.
Crude oil prices rocketed back beyond US$61 after falling briefly following the terrorist bombings in London.
On other markets, the Italian MIB closed 1.81 percent higher at 32,769 points, the Spanish IBEX-35 finished up 1.54 percent at 9,793.2, and the Dutch AEX was 1.25 percent higher at 388.60.
The Swiss SMI gained 0.99 percent to 6,312.2, while the Belgian BEL-20 closed up 0.55 percent at 3,107.01.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in