European stocks posted their third weekly drop amid concern that the US Federal Reserve may reduce bond buying as soon as September and as the European Central Bank (ECB) refrained from announcing new stimulus.
Man Group PLC, the biggest publicly traded hedge fund manager, plunged 18 percent after reporting a decline in the net asset value of its flagship fund. Aberdeen Asset Management PLC tumbled 11 percent, as Voestalpine AG climbed 10 percent after raising its dividend and Elan Corp gained 5.5 percent after Royalty Pharma increased its offer for the Irish drugmaker.
National benchmark indices declined in all of western Europe’s 18 markets except Iceland. The UK’s FTSE 100 Index lost 2.6 percent, Germany’s DAX slid 1.1 percent and France’s CAC 40 retreated 1.9 percent.
The ECB kept its benchmark interest rate unchanged and refrained from announcing new stimulus measures, but ECB President Mario Draghi on Thursday said policymakers are prepared to take additional steps if needed.
The STOXX Europe 600 Index fell 1.8 percent to 295.4 for the longest streak of weekly losses in two months. The gauge still rebounded on Friday, trimming a weekly retreat of as much as 3.4 percent, as investors bet that US data showing an increase in both hiring and the unemployment rate left little scope for an immediate reduction in stimulus measures.
Separate statements from Fed officials earlier in the week had spurred concern that the central bank may start trimming its US$85 billion monthly bond purchases in September.
Fed Bank of San Francisco President John Williams said in Stockholm that policymakers may end quantitative easing by the end of the year, while Fed Bank of Dallas President Richard Fisher — who opposed the current round of bond-buying in September last year, as well as the expansion of the program to US Treasuries in December — reiterated his backing for reducing stimulus.
Fed Bank of Kansas City President Esther George supported slowing purchases “as an appropriate next step for monetary policy,” according to a speech.
Also this week, economists at Goldman Sachs Group Inc and Deutsche Bank AG predicted that the Fed could start winding down its bond-buying program.
Still, Fed Bank of Atlanta President Dennis Lockhart on Monday said the US central bank is committed to the program and that the US economy lacks the strength to justify a reduction.
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
A proposed 100 percent tariff on chip imports announced by US President Donald Trump could shift more of Taiwan’s semiconductor production overseas, a Taiwan Institute of Economic Research (TIER) researcher said yesterday. Trump’s tariff policy will accelerate the global semiconductor industry’s pace to establish roots in the US, leading to higher supply chain costs and ultimately raising prices of consumer electronics and creating uncertainty for future market demand, Arisa Liu (劉佩真) at the institute’s Taiwan Industry Economics Database said in a telephone interview. Trump’s move signals his intention to "restore the glory of the US semiconductor industry," Liu noted, saying that
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
STILL UNCLEAR: Several aspects of the policy still need to be clarified, such as whether the exemptions would expand to related products, PwC Taiwan warned The TAIEX surged yesterday, led by gains in Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), after US President Donald Trump announced a sweeping 100 percent tariff on imported semiconductors — while exempting companies operating or building plants in the US, which includes TSMC. The benchmark index jumped 556.41 points, or 2.37 percent, to close at 24,003.77, breaching the 24,000-point level and hitting its highest close this year, Taiwan Stock Exchange (TWSE) data showed. TSMC rose NT$55, or 4.89 percent, to close at a record NT$1,180, as the company is already investing heavily in a multibillion-dollar plant in Arizona that led investors to assume
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