European stocks advanced to a six-year high after a report showed that the US economy created more jobs last month than forecast.
Commerzbank AG climbed 4.2 percent after the lender’s chief executive officer predicted that the European Central Bank (ECB) would find no problems during an audit, while Italian and Irish banks spurred the STOXX Europe 600 Index higher as yields on the two countries’ bonds fell to the lowest level since the introduction of the euro.
Commerzbank CEO Martin Blessing predicted in an interview with Neue Zuercher Zeitung that the audit would not reveal any issues for Germany’s second-biggest bank and said that the lender’s equity ratio exceeded the minimum set by the central bank.
The STOXX 600 rose 0.6 percent to 347.13 at 4:30pm in London on Friday, compared with 344.24 on May 30, when it posted its seventh weekly advance.
The benchmark index gained 0.8 percent over the week as the European Central Bank lowered interest rates and unveiled a package of cheap loans for the eurozone’s banks.
The equity gauge has posted gains for the past eight weeks, its longest winning streak since the summer of 2012 when ECB President Mario Draghi said the financial authority “is ready to do whatever it takes to preserve the euro — believe me, it will be enough.”
“The US economy remains the main locomotive for the global economy still,” Pierre Mouton, who helps oversee about US$8 billion at Notz, Stucki & Cie in Geneva, Switzerland, said by telephone. “It is quite logical that the jobs data is taken as good news and helps markets perform well. In my view, the US economy is stronger than most forecasters maintain.”
European equities climbed on Thursday when Draghi unveiled a series of refinancing operations worth as much as 400 billion euros (US$546 billion). He also said officials would intensify work on a potential asset-purchase program.
The EU’s central bank cut its deposit rate to minus-0.1 percent, becoming the first major central bank in the world to take one of its main rates negative, while also lowering its benchmark interest rate to 0.15 percent in a bid to avoid deflation.
National benchmark indices rose in every Western European markets that opened on Friday except for Iceland. France’s CAC 40 climbed 0.7 percent, Germany’s DAX rose 0.3 percent and the UK’s FTSE 100 added 0.6 percent.
Italian lenders led a gauge of European banks higher as the country’s 10-year bond yield dropped to 2.756 percent, its lowest in more than 20 years.
Banca Monte dei Paschi di Siena SpA fell 2 percent after saying it plans to offer new shares to investors at a 35.5 percent discount in an attempt to rebuild capital, while Banca Popolare di Milano Scarl jumped 7 percent to 0.727 euros and UniCredit SpA — Italy’s largest bank — gained 1.9 percent to 0.678 euros.
Banco Popolare SC climbed 5.5 percent to 0.1480 euros.
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