European shares lost ground on Friday as investors continued to worry about the impact of higher interest rates, while shares in French bank BNP Paribas rose after a report stirred up takeover hopes for the group.
The UK FTSE 100 index closed virtually unchanged at 6,505.10, the German DAX Xetra 30 index fell 0.4 percent to 7,590.50 and the French CAC-40 index slipped 0.1 percent to 5,883.29.
Equity markets have come under pressure as perceptions of interest rate levels have changed after indications of stronger-than-expected economic growth, particularly in the US. Most investors no longer expect the US Federal Reserve to cut interest rates this year and both the European Central Bank and the Bank of England are expected to raise rates later in the year.
Gains of more than 1.1 percent from chipmakers Infineon Technologies and STMicroelectronics and a positive open on Wall Street weren't enough to lift European markets to a higher close.
Mining companies were mostly lower. Kazakhmys fell 1.4 percent, Vedanta Resources lost 2.5 percent and BHP Billiton dropped 1.4 percent.
French bank BNP Paribas managed to gain 1.5 percent in Paris after a report that Societe Generale has commissioned two banks, one of which is Morgan Stanley, to study two cases of a possible tie-up with peer BNP Paribas, French daily Les Echos reported, without citing sources.
UK retail bank Lloyds TSB Group said that it has continued to make strong progress in the first half of the year. Shares slipped 0.3 percent, just underperforming the broader London market.
Elsewhere in Europe, in Milan the SP/MIB fell 0.51 percent to 41,712 points, in Amsterdam the AEX lost 0.07 percent to 534.69 points and in Brussels the BEL 20 lost 0.08 percent to 4,507.90 points.
The Swiss SMI index fell 0.02 percent to 9,150.62 points, while the EuroSTOXX 50 index fell 0.11 percent to 4,376.42 points.
Japanese technology giant Softbank Group Corp said Tuesday it has sold its stake in Nvidia Corp, raising US$5.8 billion to pour into other investments. It also reported its profit nearly tripled in the first half of this fiscal year from a year earlier. Tokyo-based Softbank said it sold the stake in Silicon Vally-based Nvidia last month, a move that reflects its shift in focus to OpenAI, owner of the artificial intelligence (AI) chatbot ChatGPT. Softbank reported its profit in the April-to-September period soared to about 2.5 trillion yen (about US$13 billion). Its sales for the six month period rose 7.7 percent year-on-year
CRESTING WAVE: Companies are still buying in, but the shivers in the market could be the first signs that the AI wave has peaked and the collapse is upon the world Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported a new monthly record of NT$367.47 billion (US$11.85 billion) in consolidated sales for last month thanks to global demand for artificial intelligence (AI) applications. Last month’s figure represented 16.9 percent annual growth, the slowest pace since February last year. On a monthly basis, sales rose 11 percent. Cumulative sales in the first 10 months of the year grew 33.8 percent year-on-year to NT$3.13 trillion, a record for the same period in the company’s history. However, the slowing growth in monthly sales last month highlights uncertainty over the sustainability of the AI boom even as
AI BOOST: Next year, the cloud and networking product business is expected to remain a key revenue pillar for the company, Hon Hai chairman Young Liu said Manufacturing giant Hon Hai Precision Industry Co (鴻海精密) yesterday posted its best third-quarter profit in the company’s history, backed by strong demand for artificial intelligence (AI) servers. Net profit expanded 17 percent annually to NT$57.67 billion (US$1.86 billion) from NT$44.36 billion, the company said. On a quarterly basis, net profit soared 30 percent from NT$44.36 billion, it said. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said earnings per share expanded to NT$4.15 from NT$3.55 a year earlier and NT$3.19 in the second quarter. Gross margin improved to 6.35 percent,
FAULTs BELOW: Asia is particularly susceptible to anything unfortunate happening to the AI industry, with tech companies hugely responsible for its market strength The sudden slump in Asia’s technology shares last week has jolted investors, serving as a stark reminder that the world-beating rally in artificial intelligence (AI) and semiconductor stocks might be nearing a short-term crest. The region’s sharpest decline since April — triggered by a tech-led sell-off on Wall Street — has refocused attention on cracks beneath the surface: the rally’s narrow breadth, heavy reliance on retail traders, and growing uncertainty around the timing of US Federal Reserve interest-rate cuts. Last week’s “sell-off is a reminder that Asia’s market structure is just more vulnerable,” Saxo Markets chief investment strategist Charu Chanana said in
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