Tumbling oil prices and the worst rout in Greek equities since 1987 sent European shares to their biggest weekly slump in more than three years.
Friday’s 2.6 percent plunge in the STOXX Europe 600 Index was the largest in almost two months and extended the week’s losses to 5.8 percent. That was more than double the five-day drop in the MSCI Asia Pacific Index and Standard & Poor’s 500 Index.
With oil tumbling to a five-year low, European energy companies slumped to their lowest level since April 2009 and commodity producers had their worst week since May 2012.
GREEK COLLAPSE
In Greece, anxiety that voters will kick out leaders committed to the nation’s bailout sent the ASE Index down 20 percent, making it this year’s worst-performing equity market after Russia.
“Investors are taking profit on the eurozone, which has performed quite well since October,” Claudia Panseri, a global equity strategist at SG Private Banking in Paris, said by phone. “With oil furthering its decline, all commodities are under pressure, especially miners.”
After rallying 13 percent from this year’s low to an almost seven-year high on Dec. 5, the STOXX 600 retreated to its lowest level since Oct. 29. The gauge is now up only 0.7 percent for this year.
OPEC said it sees demand for crude next year at the weakest level in 12 years, and the International Energy Agency cut its global demand forecast for the fourth time in five months. That pushed oil down further and energy stocks in Europe sank 9.4 percent this week. Royal Dutch Shell PLC lost 7.7 percent and Total SA fell 9 percent.
MINING FALLS
A gauge of miners tumbled 8.5 percent, reaching its lowest level since July last year. BHP Billiton Ltd lost 10 percent and Rio Tinto Group declined 7.4 percent.
Friday’s drop in Greek shares sent the ASE to its lowest level since July last year. Piraeus Bank SA and National Bank of Greece SA slumped more than 27 percent this week for the biggest declines among STOXX 600 shares.
Greece’s government said it would start the process of electing a new president early. The risk is that Greek Prime Minister Antonis Samaras will have to call a parliamentary election that anti-bailout party Syriza might win, reintroducing the turmoil that threatened the European currency union two years ago. Syriza wants a writedown on Greek debt held by eurozone member states and the European Central Bank.
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