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.
EXPANSION: The investment came as ASE in July told investors it would accelerate capacity growth to mitigate supply issues, and would boost spending by 16 percent ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembly and testing service provider, yesterday said it is investing NT$17.6 billion (US$578.6 million) to build a new advanced chip packaging facility in Kaohsiung to cope with fast-growing demand from artificial intelligence (AI), high-performance-computing (HPC) and automotive applications. The new fab, called K18B, is to commence operation in the first quarter of 2028, offering chip-on-wafer-on-substrate (CoWoS) chip packaging and final testing services, ASE said in a statement. The fab is to create 2,000 new jobs upon its completion, ASE said. A wide spectrum of system-level chip packaging technologies would be available at
Taiwan’s foreign exchange reserves hit a record high at the end of last month, surpassing the US$600 billion mark for the first time, the central bank said yesterday. Last month, the country’s foreign exchange reserves rose US$5.51 billion from a month earlier to reach US$602.94 billion due to an increase in returns from the central bank’s portfolio management, the movement of other foreign currencies in the portfolio against the US dollar and the bank’s efforts to smooth the volatility of the New Taiwan dollar. Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民)said a rate cut cycle launched by the US Federal Reserve
HEAVYWEIGHT: The TAIEX ended up 382.67 points, with about 280 of those points contributed by TSMC shares alone, which rose 2.56 percent to close at NT$1,400 Shares in Taiwan broke records at the end of yesterday’s session after contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) hit a fresh closing-high amid enthusiasm toward artificial intelligence (AI) development, dealers said. The TAIEX ended up 382.67 points, or 1.45 percent, at the day’s high of 26,761.06. Turnover totaled NT$463.09 billion (US$15.22 billion). “The local main board has repeatedly hit new closing highs in the past few sessions as investors continued to embrace high hopes about AI applications, taking cues from a strong showing in shares of US-based AI chip designer Nvidia Corp,” Hua Nan Securities Co (華南永昌證券) analyst Kevin Su
Nvidia Corp’s major server production partner Hon Hai Precision Industry Co (鴻海精密) reported 10.99 percent year-on-year growth in quarterly sales, signaling healthy demand for artificial intelligence (AI) infrastructure. Revenue totaled NT$2.06 trillion (US$67.72 billion) in the last quarter, in line with analysts’ projections, a company statement said. On a quarterly basis, revenue was up 14.47 percent. Hon Hai’s businesses cover four primary product segments: cloud and networking, smart consumer electronics, computing, and components and other products. Last quarter, “cloud and networking products delivered strong growth, components and other products demonstrated significant growth, while smart consumer electronics and computing products slightly declined,” compared with the
RSS