European stocks snapped two weeks of losses this week, as concern over a potential default by the US government faded and the nomination of US Federal Reserve Vice Chairwoman Janet Yellen to head the US central bank signaled the continuation of its stimulus.
Celesio AG surged 19 percent as McKesson Corp was said to be in talks to buy a majority stake in the drug wholesaler, while Persimmon PLC and Taylor Wimpey PLC led house builders higher as British property prices surged to an 11-year high and Goldman Sachs Groups Inc predicted further growth. Meanwhile, TGS Nopec Geophysical Co slumped 16 percent after reducing its sales forecast because of delays in getting permits for new surveys.
The STOXX Europe 600 Index added 0.6 percent to 311.61 this week after slipping 1.4 percent in the previous two weeks. The gauge has rallied 11 percent so far this year as the eurozone emerged from a recession and central banks maintained stimulus measures to support the global economy.
National benchmark indices advanced in 13 of the 18 western European markets this week. Germany’s DAX increased 1 percent to a record-high, while the UK’s FTSE 100 added 0.3 percent and France’s CAC 40 rose 1.2 percent.
The STOXX 600 lost 1.5 percent in the first three days of the week as a partial shutdown of the US government continued, but reversed losses as signs of a temporary resolution to the fiscal impasse emerged later in the week when Republicans in the US House of Representative proposed a short-term increase to the debt ceiling that would buy the government time until Nov. 22 to conclude a longer agreement.
Obama had earlier warned that the world’s biggest economy would slide into a recession if lawmakers failed to raise the ceiling.
Without congressional action, the US will exhaust its borrowing authority by Thursday next week, according to the US Department of the Treasury.
“Many investors believe that a solution to the US debt problem will be found, even if just a temporary one,” said Yves Maillot, who manages 18.5 billion euros (US$25 billion) as head of European equities at Natixis Asset Management in Paris.
Investors also turned their attention to corporate earnings as the shutdown delayed the release of some US economic data. Alcoa Inc, JPMorgan Chase & Co and Wells Fargo & Co all posted results that exceeded analysts’ estimates this week.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by