European stocks fell this week as investors speculated the STOXX Europe 600 Index’s best start to a year since 1998 has overshot the outlook for the economy.
The benchmark STOXX 600 slid 0.7 percent to 265.44 this week, the biggest drop since Feb. 10. The gauge rose for the past three days as Greece persuaded most bondholders to accept a debt exchange, rebounding from the biggest two-day drop since November last year earlier in the week. The index had climbed 9.3 percent from the start of the year through March 2 as the European Central Bank (ECB) lent the region’s lenders more than 1 trillion euros and US data topped forecasts.
“The force of the move into the new year really took the market into extended overbought conditions; technically it looked like there was a need for some consolidation,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd in London.
The STOXX 600 dropped 3.3 percent in the first two days of the week, sliding to the lowest level since January, as China cut its forecast for economic growth this year to 7.5 percent from 8 percent. Data in the euro area showed manufacturing and services shrank more than estimated and fourth-quarter GDP contracted 0.3 percent.
In contrast, US employers boosted payrolls more than forecast last month, indicating companies are growing more optimistic about the expansion in the world’s largest economy. The jobless rate held at 8.3 percent.
“The sharp decline in equity markets earlier this week begs the question whether a liquidity-fueled rally has ended and the gravitational pull of weaker economic prospects will take hold,” said Rupert Caldecott, chief investment officer for global asset allocation at Dalton Strategic Partnership LLP in London. “After a sharp and relatively smooth advance in equities over the past three months, and a consequent decline in investor risk measures, a pause and adjustment is not so surprising.”
Banks posted the largest losses among the 19 industry groups in the Stoxx 600 as lenders from Lisbon-based Banco Espirito Santo SA to Barclays PLC in London fell more than 6 percent. Food and drink companies posted the biggest advance.
National benchmark indexes fell in 15 of the 18 western European markets. The UK’s FTSE 100 and France’s CAC 40 both lost 0.4 percent, while Germany’s DAX declined 0.6 percent.
Greece’s ASE Index rose 0.4 percent as the country pushed through the biggest sovereign restructuring in history after cajoling private creditors to forgive more than 100 billion (US$132 billion) of debt.
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