European stocks strengthened a rally that has recouped more than half the losses from the aftermath of the Brexit vote.
The STOXX Europe 600 Index added 0.7 percent at the close, capping its biggest weekly gain in a month.
The UK’s FTSE 100 Index also advanced, completing its best four-day jump since 2008 amid a weakening pound and rising commodities.
After a two-day selloff sparked by Britain’s shock vote to quit the EU, the STOXX 600 has recovered 7.6 percent, the biggest surge since February, as central banks stepped up to reassure investors they were ready to act.
Lenders reversed a drop after the Bank of England was said to be planning a cut in capital requirements as early as next week.
Standard Chartered PLC and UBS Group AG rose more than 2 percent.
“Policymakers have been very level-headed,” said Francois Savary, who helps oversee the equivalent of US$2.6 billion as chief investment officer at Prime Partners in Geneva, Switzerland.
“It’s all about the relief that central banks have intervened, but this rebound is not part of a new trend. There are still political uncertainties and let’s not forget that we’re in a low-growth environment where corporate profits are struggling,” Savary added.
Equities extended gains after British Secretary of State for Justice Michael Gove, in the fray to become the country’s next prime minister, said he does not expect the formal mechanism to leave the EU to be triggered this year.
Theresa May, the bookmakers’ favorite for the position, has said the same.
The central bank could loosen policy within months, Bank of England Governor Mark Carney said on Friday, while the European Central Bank was said to be considering loosening the rules for its bond purchases.
The STOXX 600 trimmed its first monthly loss in four and is up 3.2 percent for the week.
Stocks were volatile in the run-up to and the aftermath of the Brexit vote, with trading volume reaching records. A gauge of eurozone equity swings surged to a 10-month high before the referendum, before subsiding to a three-week low.
The VSTOXX Index fell for a fifth session yesterday.
Eurozone manufacturing last month grew faster than initially estimated, a report with results collected prior to the referendum showed yesterday, while another release showed unemployment in the region fell to an almost five-year low.
All 19 industry groups on the STOXX 600 advanced, with Volkswagen AG and PSA Peugeot Citroen leading carmakers to the best performance.
Among shares active on corporate news, Temenos Group AG climbed 3.1 percent after the Swiss software maker said Standard Chartered would use its wealth management program in more than 30 markets.
Telefonica Deutschland Holding AG slid 2.5 percent after Credit Suisse Group AG downgraded the shares to “neutral,” citing increased competition in Germany.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to