European stocks extended a third weekly increase, amid optimism that the economy is strong enough to withstand higher US borrowing costs, as traders awaited a speech by US Federal Reserve Chair Janet Yellen.
The STOXX Europe 600 Index added 0.2 percent at the close of trading in London, taking its advance to 3.4 percent for the week.
The number of shares on the gauge changing hands was about 20 percent lower than the 30-day average, before holidays in the UK and the US tomorrow.
Photo: Bloomberg
European shares posted their best weekly gains since February, resuming a rally that had stalled after a 16 percent rebound from a low that month.
After hawkish comments from Fed officials, traders increased the chances of an interest-rate increase next month to 30 percent and to 54 percent for July.
Data showed the US economy in the first quarter expanded at a slightly faster pace than initially estimated, and Yellen spoke on Friday after the close of European markets.
“The markets have been prepared and have had time to price it in,” said Otto Waser, head of investment research at R&A Group Research & Asset Management in Zurich, referring to a potential rate increase. “A Fed rate hike doesn’t change anything, but gives more confidence that the US economy is on track.”
The region’s benchmark gauge posted its longest streak of weekly gains since March and closed 0.3 percent away from its April 20 high.
On Friday, steelmaker Voestalpine AG climbed 2.7 percent after Berenberg wrote in a note that the company is benefiting from strength in the auto industry.
Roche Holding AG led gains among healthcare companies, up 4 percent, after its Genentech unit reported positive drug results.
Satellite-services provider SES SA slumped 10 percent after a stock offering. Banco Popular Espanol SA fell for a second day, extending a record low, after its biggest slump since 1999 following a share sale.
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
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by