European stock-index futures increased after the STOXX Europe 600 Index completed its first back-to-back weekly losses since March, with the German benchmark gauge entering a correction.
Futures on the Euro STOXX 50 Index expiring in September climbed 0.3 percent to 3,023 at 7:20pm in London. The STOXX 600 lost 0.6 percent on Friday, posting a 2.1 percent decline for the week and closing at its lowest level since March 24. The DAX Index dropped as much as 11 percent from its July 3 record, while France’s CAC 40 Index lost more than 10 percent in intraday trading from its six-year high in June.
European index futures rose after the close amid signs tension in Ukraine is easing. Interfax said military exercises near the Ukraine border are over, citing Russia’s defense ministry. Shares pared losses earlier after RIA Novosti reported that Russia seeks a de-escalation of the conflict in Ukraine.
US President Barack Obama’s authorization of air strikes against militants in Iraq late on Thursday accelerated a retreat in European stocks that started weeks ago. Concern over the crises in Ukraine and Israel, as well as shares from Europe’s periphery slumping after their rallies, have sent the Euro STOXX 50 of euro-area shares down as much as 10 percent in Friday’s trading from its high on June 19.
The Euro STOXX 50 dropped 2.1 percent this week, closing at its lowest level since March 14. It lost 1.2 percent on Thursday after European Central Bank President Mario Draghi said geopolitical risks in countries such as Ukraine could hurt the economic recovery. The gauge earlier on Friday fell as much as 1.2 percent, or down 10 percent from this year’s high. It rallied 83 percent from the low in March 2009 through June 19.
The STOXX 600 is down 7.1 percent from June 10, when it reached its highest level since January 2008.
Shares in Europe’s peripheral nations bore the brunt of the losses. The PSI 20 Index, Portugal’s national benchmark gauge, has slumped 30 percent since its almost three-year high in April and closed at a one-year low. The fallout of Banco Espirito Santo SA helped the gauge post this quarter’s biggest decline among 24 developed markets tracked by Bloomberg, reviving concerns over the health of the financial system.
Italy’s FTSE MIB Index has lost 15 percent since its June high, extending losses after a government report this week showed the nation’s economy fell into a recession in the first half of the year.
Greece’s ASE Index is down 24 percent from its high on March 18 and closed at its lowest level since October.
Obama authorized limited air strikes against Sunni militants in Iraq to protect US personnel and Yezidis, a minority group concentrated in the north of the country who have been targeted by militants and are stranded on a mountain.
“This just adds another geopolitical tension to a market that’s already surrounded in uncertainty, with Israel, Ukraine and now Iraq,” said Francois Savary, chief investment officer at Reyl & Cie in Geneva.
“The big question is whether this will provoke a slowdown in global economic activity, or even a recession, to the extent that you have to reassess the recovery. That’s impacting investors’ reasoning and creates all the conditions for volatility to increase,” he said.
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
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Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San