European stocks climbed for a seventh straight week, the longest winning streak in more than six years, as better-than-expected earnings offset concern that the euro area crisis is deepening.
The STOXX Europe 600 Index climbed 0.8 percent to 258.17 this week, for the longest stretch of gains since January 2006, even after falling 1.4 percent on Friday. The gauge has rebounded 10 percent from this year’s low on June 4 as central banks from Europe to China eased monetary policy to help spur economic growth.
“Investors have been given the rare opportunity to focus on companies as the earnings reporting season continued to filter through,” said Simon Reynolds, a fund manager at Octopus Investments in London. “Upbeat US earnings have helped lift equity markets.”
Of the 46 companies on the STOXX 600 that have reported earnings this quarter, 48 percent beat forecasts, according to data compiled by Bloomberg. On the Standard & Poor’s 500 Index, 73 percent of the 118 companies that have reported quarterly earnings have topped analyst estimates, the data show.
National benchmark indexes rose in 11 of the 18 western European markets this week. Germany’s DAX rallied 1.1 percent, France’s CAC 40 advanced 0.4 percent and Switzerland’s SMI gained 1.7 percent. The UK’s FTSE 100 lost 0.3 percent, while Spain’s IBEX 35 fell 6.3 percent and Italy’s FTSE MIB retreated 4.7 percent.
European stocks dropped on Friday, paring their weekly advance, as the yield premium for Spanish benchmark bonds over German bunds surged to a record. Spanish bonds declined, pushing the extra yield investors demand to hold the nation’s 10-year securities instead of similar-maturity German bunds to the most on record.
Spain’s recession will extend into next year as the region of Valencia prepared to seek a rescue from the central government and European finance ministers approved the bailout of Spanish banks, Spanish Budget Minister Cristobal Montoro said after the Cabinet met on Friday in Madrid. GDP will fall 0.5 percent next year instead of rising 0.2 percent as the government predicted on April 27, Montoro said.
ASML surged 9.7 percent after the chipmaker said second- quarter net bookings climbed 9.8 percent and that technological advances will boost business in the longer term.
Akzo Nobel jumped 10 percent. The company reported second-quarter earnings ahead of analyst forecasts as chief executive officer Ton Buechner drives ahead with a revamp to improve profitability.
SEB, the second-largest lender in the Baltic countries, and Nordea Bank AB, the Nordic region’s biggest bank, also reported earnings that topped analysts’ estimates. The shares gained 8 percent and 2.1 percent respectively.
Remy Cointreau SA increased 6.1 percent in Paris as France’s second-biggest distiller reported an increase in first-quarter sales that also topped projections.
CSR PLC surged 37 percent after Samsung Electronics Co agreed to buy its wireless technology unit for US$310 million.
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
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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