European stocks climbed this week as Moody’s Investors Service reiterated its investment-grade debt rating on Spain following a review and US reports on retail sales, manufacturing and house building beat estimates.
ArcelorMittal advanced 9.8 percent after a report said the steelmaker is considering the sale of a minority stake in its Canadian iron ore unit. Remy Cointreau SA slumped 9.3 percent after France’s second-biggest distiller posted an improvement in first-half sales that trailed analysts’ projections.
The STOXX Europe 600 Index climbed 1.7 percent to 274.08 this past week, after dropping 1.7 percent the previous week. The equity benchmark has rallied 17 percent from this year’s low on June 4 as European Central Bank (ECB) policymakers approved an unlimited bond buying program and the US Federal Reserve announced a third round of quantitative easing.
“The rating assessment of Spain at the beginning of the week certainly gave the market a positive shove,” said Christian Zogg, who manages about US$540 million as head of equity and fixed income at LLB Asset Management AG in Vaduz, Liechtenstein. “The US data turned out to be good news as well. The market may hold rather well until the end of the year; one just needs to endure the volatility.”
National benchmark indexes gained in every Western European market except Norway and Iceland this past week. Germany’s DAX advanced 2 percent, while the UK’s FTSE 100 added 1.8 percent. France’s CAC 40 and Spain’s IBEX 35 each rallied 3.4 percent.
Moody’s decided against removing Spain’s investment-grade credit rating on Tuesday. The ratings company said that the risk of the country losing access to credit markets has fallen because the ECB now has the power to buy its debt. Moody’s assigned a negative outlook on Spain’s bonds as it concluded a review that it began in June.
Cyprus, Portugal, Ireland and Greece all have ratings below investment grade. S&P has a negative outlook on its “BBB-” rating for Spain, while Fitch Ratings has given the country a “BBB” score, two levels higher than junk.
EU leaders agreed on a timetable to introduce common regulation of the eurozone’s 6,000 lenders by Jan. 1, 2014. At a two-day summit, the 27 member states decided to put in place the framework for the ECB to move to oversee all the banks in the currency area next year.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, booked its first-ever profit from its Arizona subsidiary in the first half of this year, four years after operations began, a company financial statement showed. Wholly owned by TSMC, the Arizona unit contributed NT$4.52 billion (US$150.1 million) in net profit, compared with a loss of NT$4.34 billion a year earlier, the statement showed. The company attributed the turnaround to strong market demand and high factory utilization. The Arizona unit counts Apple Inc, Nvidia Corp and Advanced Micro Devices Inc among its major customers. The firm’s first fab in Arizona began high-volume production
VOTE OF CONFIDENCE: The Japanese company is adding Intel to an investment portfolio that includes artificial intelligence linchpins Nvidia Corp and TSMC Softbank Group Corp agreed to buy US$2 billion of Intel Corp stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions. The Japanese company, which is adding Intel to an investment portfolio that includes artificial intelligence (AI) linchpins Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), is to pay US$23 a share — a small discount to Intel’s last close. Shares of the US chipmaker, which would issue new stock to Softbank, surged more than 5 percent in after-hours trading. Softbank’s stock fell as much as 5.4 percent on Tuesday in Tokyo, its
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
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