European stocks posted a second weekly advance, with the benchmark index reaching a six-year high, as mining companies rallied and the World Bank’s upgrade of global-growth forecasts offset concern over valuations.
PSA Peugeot Citroen led gains, completing its biggest weekly increase in eight months, while Rio Tinto Group helped a gauge of commodity producers surge the most in two years after Citigroup Inc made a bullish case for the industry and Deutsche Bank AG climbed 6.8 percent to track European lenders higher as an international supervisory group eased minimum-capital norms.
On the losing side this week was Ashmore Group PLC, which fell 13 percent after clients pulled US$3.5 billion from the emerging markets money manager.
The STOXX Europe 600 Index rose 1.8 percent to 335.82 this week.
The measure has added 2.3 percent since the start of the year after posting a 17 percent rally last year, as regional central banks pledged continued support for the economic recovery. That sent the gauge’s price-to-earnings ratio — based on its members’ estimated earnings — to 14.1, above the five-year average of 12.1.
“The World Bank’s growth forecasts were the first trigger which made markets such as Germany jump to new highs,” said Soeren Steinert, associate director for equities trading at Quoniam Asset Management GmbH in Frankfurt, Germany. “Investors not wishing to miss out on ongoing gains were squeezed back into the market.”
National benchmark indices rose in 16 of western Europe’s 18 markets this week. The UK’s FTSE 100 gained 1.3 percent, the DAX advanced 2.9 percent in Berlin to post the best performance among the developed markets tracked by Bloomberg and France’s CAC 40 increased 1.8 percent.
The World Bank raised its global growth forecasts after predicting that the economy will expand 3.2 percent this year. That is higher than the 3 percent it projected in June last year.
The Washington-based lender raised its growth estimate for the richest nations to 2.2 percent from 2 percent, with part of the increase reflecting improvement in the 18-country eurozone.
Earnings for companies in the STOXX 600 are set to climb 13 percent this year after dropping 5.3 percent last year, according to analysts’ estimates compiled by Bloomberg.
The average daily volume this week on the STOXX 600 across all exchanges was 12 percent higher than the average recorded over the past 12 months, data compiled by Bloomberg show.
Expected volatility on the Euro STOXX 50 Index based on options prices fell to the lowest level in four weeks.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts