Retailers led a fourth day of declines in European shares in a holiday-shortened week.
Next PLC led retail shares to the worst performance among STOXX Europe 600 Index groups, down 15 percent after cutting its annual sales-growth forecast. Marks & Spencer Group PLC and Associated British Foods PLC, owner of clothing chain Primark, slid 4.9 percent or more.
Volkswagen AG dropped 2 percent after it failed to reach an agreement with US authorities over its tainted diesel engines.
Europe’s benchmark dropped 1.5 percent at the close of trading on Thursday. The volume of shares changing hands was one-third of a percentage point lower than the 30-day average. Markets were closed on Friday for the Good Friday holiday, with some including Norway and Denmark shut on Thursday as well.
The STOXX Europe 600 capped its longest losing streak in six weeks as investors awaited the European earnings season and speculated on the pace of US Federal Reserve rate hikes. It has not posted back-to-back gains since it reached a two-month high on March 14, signaling a loss of momentum for the rally that more than halved its decline this year.
“It might make sense to take some chips off the table after you have made decent money, given the rally we have seen in the last six weeks,” said Pierre Mouton, who helps oversee about US$9 billion at Notz, Stucki & Cie in Geneva. “We also have the earnings season coming up and it could be disappointing so investors are thinking it’s better to book profits now.”
Analysts have slashed their estimates for European corporate earnings this year. They are now projecting a profit decline of 0.9 percent for STOXX 600 firms, compared with an increase of 5.7 percent at the start of the year.
The STOXX 600 fell 1.9 percent this week for a second consecutive decline, trimming its first monthly advance since November last year.
It rebounded as much as 14 percent since a Feb. 11 low amid optimism about central-bank policies.
Lenders, the worst performers this year, declined to a one-month low.
Banco Popolare SC slipped 4.8 percent after agreeing to buy Banca Popolare di Milano Scarl, which slid 5.4 percent.
Standard Chartered PLC tumbled 7.8 percent after peer Australia & New Zealand Banking Group Ltd warned of higher bad-debt provisions because of low commodity prices.
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