European stocks retreated this week as protests in Egypt and an unexpected drop in the UK’s GDP offset accelerating US economic growth in the fourth quarter.
UK clothing retailer Next PLC slumped 7 percent as the UK economy shrank. AXA SA rallied 2.9 percent after HSBC Holdings PLC said insurers face “limited risks” from indebted eurozone countries. Software AG led technology stocks higher, rising 12 percent this past week after reporting better-than-estimated profits.
The benchmark STOXX Europe 600 Index fell 0.3 percent to 280.45 for the measure’s second straight weekly decline. Even so, the gauge has rallied 21 percent since its low in May last year amid optimism that the US economy is strengthening and as European governments implemented policies to support indebted countries using the single currency.
“Some of the European data was weak and the UK’s gross domestic product was lower than expected, although the message on the US economy is still okay to good, which should support equity markets going forward,” said Simon Maughan, co-head of European equities at MF Global UK Ltd.
Stocks fluctuated earlier in the week amid worse-than-forecast economic data in Europe. The Office for National Statistics in London said the UK’s GDP shrank 0.5 percent in the three months through last month after increasing 0.7 percent in the previous quarter. Economists surveyed by Bloomberg had forecast a 0.5 percent gain.
The country’s economic growth would have been “flattish” in the quarter without the unexpectedly cold weather last month, the statistics office said.
Meanwhile, a gauge of European bank shares dropped 1.3 percent as a plan by Spain’s government to strengthen its indebted savings banks failed to convince investors.
Spanish Minister of Economy and Finance Elena Salgado said the country’s lenders require no more than 20 billion euros (US$27.2 billion) of extra capital, “all or part” of which they will be able to raise in financial markets. Lenders will have until the autumn to raise enough capital to meet the rules.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to