European stocks posted a second weekly loss, their first back-to-back decline in two months, as investor demand for equities waned before Christmas holidays and concern rose over a US Federal Reserve meeting next week on stimulus measures.
PSA Peugeot Citroen completed the biggest weekly slump since 2008 after disclosing a US$1.5 billion charge and as General Motors Co sold its entire stake in the French carmaker. RSA Insurance Group PLC slid 9.1 percent after CEO Simon Lee resigned amid an accounting probe that raised questions about internal controls at the insurer. John Wood Group PLC tumbled 9.6 percent after saying earnings next year at its engineering group may decrease by about 15 percent.
The STOXX Europe 600 Index fell 2.1 percent to 309.75 this week, with mean daily trading plunging 14 percent from this year’s average volume. The gauge has dropped 4.7 percent this month, trimming this year’s gains to 11 percent, as better-than- estimated US economic data led some investors to speculate the Fed will decide to slow bond purchases as early as next week. The Euro STOXX 50 Index of euro-area stocks lost 2 percent this week.
“These markets are running on fumes,” Michael Ingram, a market strategist at BGC Partners LP in London, said by phone. “There’s no real volume and no real conviction. Most money managers have basically shut up shop for the year. They’ve made decent money this year. People don’t want to mess up their performance by trying something in December.”
National benchmark indices retreated in all 18 Western European markets except for Iceland this week. Germany’s DAX fell 1.8 percent. France’s CAC 40 dropped 1.7 percent. The UK’s FTSE 100 lost 1.7 percent for its sixth consecutive weekly decline.
A majority of investors still believe the Fed will start to reduce US$85 billion a month of bond purchases only next year. Even so, 34 percent of economists surveyed by Bloomberg on Dec. 6 predicted the US central bank would decide to taper stimulus measures at its meetings on Tuesday and Wednesday. That proportion is higher than the 17 percent of respondents who said so in a Nov. 8 poll.
The US House of Representatives on Thursday passed the first bipartisan budget in four years and the Senate will review it next week. The plan will reduce the scope of automatic spending cuts by US$63 billion, sparing the federal government another shutdown like the one it experienced in October.
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