European stocks declined for a second week after an inconclusive election in Greece left political parties struggling to form a government, increasing speculation that the nation might fail to implement austerity measures.
The STOXX Europe 600 Index retreated 0.4 percent to 251.97 this past week. The measure slid to the lowest level in almost four months on Wednesday, before rebounding 0.9 percent over the next two days. The gauge has retreated 7.5 percent since this year’s high on March 16 as concern has grown that the eurozone might fracture and Chinese economic growth missed forecasts.
“Investors are starting to ask what happens after a country leaves the euro area, which was supposed to have been a rock-solid bloc,” said Henrik Drusebjerg, a senior strategist at Nordea Bank AB in Copenhagen, where he helps oversee US$230 billion. “The risk is that it will take massive resources to keep interest rates under control in Italy and Spain if Greece leaves the monetary union.”
National benchmark indices fell in nine of the 18 Western European markets this week. The UK’s FTSE 100 declined 1.4 percent. France’s CAC 40 lost 1 percent as Francois Hollande was elected French president. Germany’s DAX advanced 0.3 percent. Greece’s ASE Index plunged 11 percent to the lowest level since 1992.
Voters in Greece flocked to anti-austerity parties in last Sunday’s election. New Democracy won 19 percent of the total vote and 108 seats in the 300-seat parliament. Pasok, the socialist party that partnered with New Democracy in securing a second rescue package for the country, trailed in third place, while Syriza, a coalition of left-wing parties that has vowed to cancel the bailout terms, came second.
Greece’s political impasse raised the possibility another election might have to be held as early as next month. The standoff has reignited European concern over Greece’s ability to hold to the terms of its two bailouts -negotiated since May 2010 and sparked concerns about the country leaving the euro.
China’s industrial production rose the least since 2009 last month, retail sales and new lending gained less than estimated, and exports also tailed forecasts.
Europe’s economy will fail to grow this year with risks to the outlook “tilted to the downside” after nations from Spain to Italy slipped into recession, the European Commission said on Friday. GDP in the 17-nation eurozone would drop 0.3 percent, the commission estimated, reiterating a February forecast.
“Some investors believe things are falling apart, though others still think stocks are cheap — but most likely stocks will have a hard time until we’re well into the summer,” said Hans Peterson, the chief investment officer at SEB Private Banking in Stockholm. “When we get into the summer, we’ll see some very attractive entry points for investors to get back into shares.”
In France, Francois Hollande defeated French President Nicolas Sarkozy to become the first Socialist in 17 years to control Europe’s second-biggest economy. He pledged to push for less austerity and more growth in the region.
German Chancellor Angela Merkel said she would welcome Hollande with “open arms,” while rejecting government stimulus as the way to spur economic growth in Europe.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
Standard Chartered Taiwan on March 26 announced that it has partnered with international fintech firm FinIQ to build an “Automated Structured Products Pricing Platform.” The bank is also introducing products from global issuers including Goldman Sachs Group Inc, Barclays PLC and BNP Paribas SA. The new platform enables an end-to-end process whereby it finds the most competitive pricing across multiple issuers in a matter of minutes, followed by automated documentation and transaction execution, which significantly shortens time-to-market and delivers a superior wealth management experience. Standard Chartered Bank Taiwan CEO Anthony Yu (游天立) said: “Standard Chartered is increasingly leveraging its wealth management
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