Stocks in Europe climbed to a two-month high this week, as European Central Bank (ECB) president Mario Draghi reiterated his commitment to raising inflation as fast as possible and China cut interest rates.
The STOXX Europe 600 Index added 2.1 percent to 345.24 at the close of trading on Friday, snapping a two-day losing streak. The equity benchmark has advanced 2.9 percent this week amid investor speculation of further ECB stimulus. Stocks extended gains on Friday after China slashed interest rates, with miners leading.
“There are two key drivers, with the first being Draghi saying inflation needs to be boosted as soon as possible, which makes quantitative easing more likely,” Steen Jakobsen, chief investment officer at Saxo Bank A/S in Copenhagen, said by telephone. “The decision of the Chinese central bank to cut interest rates shows that China is also reacting to the slowdown. This makes the market perceive a perfect risk-on day for Friday.”
Speaking at the European Banking Congress, Draghi said the ECB must drive inflation higher quickly and will widen its asset-purchase program if necessary.
Any new action would follow measures including interest rate cuts, long-term bank loans and covered bond purchases, with the buying of asset-backed securities said to have started on Friday. Draghi has also declined to rule out buying government bonds.
He said this month that ECB staff have been told to study ways to boost an economy that grew just 0.2 percent last quarter and where inflation of 0.4 percent is persistently below the bank’s goal.
China cut benchmark interest rates for the first time since July 2012 as leaders seek to support growth in the world’s second-largest economy. The reduction follows liquidity injections and targeted cuts to reserve requirements.
National benchmark indices climbed in 17 of the 18 Western European markets on Friday. Spain’s IBEX rose 3.1 percent to post its biggest advance since July last year, while Italy’s FTSE MIB added 3.9 percent for its largest gain in more than two years. Portugal’s PSI 20 Index rose 2.5 percent and Germany’s DAX increased 2.6 percent.
A gauge of commodity producers posted the biggest gain of the 19 industry groups on the STOXX 600 after China cut interest rates.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has secured three construction permits for its plan to build a state-of-the-art A14 wafer fab in Taichung, and is likely to start construction soon, the Central Taiwan Science Park Bureau said yesterday. Speaking with CNA, Wang Chun-chieh (王俊傑), deputy director general of the science park bureau, said the world’s largest contract chipmaker has received three construction permits — one to build a fab to roll out sophisticated chips, another to build a central utility plant to provide water and electricity for the facility and the other to build three office buildings. With the three permits, TSMC
The DBS Foundation yesterday announced the launch of two flagship programs, “Silver Motion” and “Happier Caregiver, Healthier Seniors,” in partnership with CCILU Ltd, Hondao Senior Citizens’ Welfare Foundation and the Garden of Hope Foundation to help Taiwan face the challenges of a rapidly aging population. The foundation said it would invest S$4.91 million (US$3.8 million) over three years to foster inclusion and resilience in an aging society. “Aging may bring challenges, but it also brings opportunities. With many Asian markets rapidly becoming super-aged, the DBS Foundation is working with a regional ecosystem of like-minded partners across the private, public and people sectors
BREAKTHROUGH TECH: Powertech expects its fan-out PLP system to become mainstream, saying it can offer three-times greater production throughput Chip packaging service provider Powertech Technology Inc (力成科技) plans to more than double its capital expenditures next year to more than NT$40 billion (US$1.31 billion) as demand for its new panel-level packaging (PLP) technology, primarily used in chips for artificial intelligence (AI) applications, has greatly exceeded what it can supply. A significant portion of the budget, about US$1 billion, would be earmarked for fan-out PLP technology, Powertech told investors yesterday. Its heavy investment in fan-out PLP technology over the past 10 years is expected to bear fruit in 2027 after the technology enters volume production, it said, adding that the tech would
RUN IT BACK: A succesful first project working with hyperscalers to design chips encouraged MediaTek to start a second project, aiming to hit stride in 2028 MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it is engaging a second hyperscaler to help design artificial intelligence (AI) accelerators used in data centers following a similar project expected to generate revenue streams soon. The first AI accelerator project is to bring in US$1 billion revenue next year and several billion US dollars more in 2027, MediaTek chief executive officer Rick Tsai (蔡力行) told a virtual investor conference yesterday. The second AI accelerator project is expected to contribute to revenue beginning in 2028, Tsai said. MediaTek yesterday raised its revenue forecast for the global AI accelerator used
RSS