European stocks plunged the most since the nadir of the February slump, as investors shunned risky assets before monetary-policy and political events later this month.
The STOXX Europe 600 Index lost 2.4 percent at the close of trading on Friday, deepening its worst weekly drop in a month to 2.5 percent. All but 16 stocks fell, with lenders in Italy and Greece among the worst performers. A gauge of eurozone stock volatility jumped 17 percent, extending its biggest weekly gain since January.
Investors are bracing for a slew of potential triggers in the next two weeks, amid signals that European Central Bank officials might sit tight on stimulus measures over the summer months.
The US Federal Reserve’s rate decision and the Bank of Japan’s policy statement are both due on Wednesday, followed by a June 23 referendum to determine Britain’s membership in the EU and Spain’s general election three days after that.
“Everybody seems angry about this market,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “It really looked like we could go to the upside, but now in Europe it seems everything is falling apart. Nobody wants to stay in the market with so many things coming up: the Fed, BOJ, Brexit vote.”
The STOXX 600 kicked off this week with gains amid a rally in oil shares and optimism the Fed would not raise rates prematurely, only to reverse direction mid-week as political uncertainty and concern over global growth took hold. The benchmark has struggled to maintain momentum in a rebound after surging 16 percent from its February low to an April 20 high. It has traded in a range of less than 25 points since March.
Among other shares active on corporate news, Deutsche Lufthansa AG dropped 5.6 percent after announcing the surprise departure of the firm’s chief financial officer Simone Menne. PSA Peugeot Citroen fell 1.6 percent after a report that 10 members of the Peugeot family might consider boosting their holding in the company.
London-based staffing company SThree PLC tumbled 8.4 percent after saying uncertainty stemming from Britain’s EU referendum has led to a slowdown in its UK business. Recruitment providers Hays PLC and PageGroup PLC slid more than 6 percent.
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