European shares rose on Friday, ending a week of losses on a positive note, with Milan outperforming thanks to a rally in its battered baking stocks.
Equities received a boost late in the session from a stronger-than-expected US jobs report.
The pan-European STOXX Europe 600 rose 1.6 percent, but still ended the week with a loss of 1.5 percent due to persistent worries over the economic and political fallout of Britain’s vote on June 23 to leave the EU.
“The concerns of the Brexit are reflected quite well in share prices so the question is how much pain [there] will be before a relief. It’s probably still a little bit away,” said Gerhard Schwarz, head of equity strategy at Baader Bank in Munich.
“It will also depend on a rebound in banks as the systemic risk due to Brexit is certainly a concern and credit risks coming from Italy are weighing on the sector,” he said.
Milan’s blue chip index outperformed the region to gain 4.1 percent, with banks Intesa Sanpaolo Banco Popolare and UniCredit posting gains of between 8.7 and 18.4 percent.
Capital weakness and a mountain of bad loans have put Italian banks at the center of investors’ immediate concerns following the shock UK vote. However, traders on Friday said there was some optimism that a solution to help Italian banks cut their soured loans could be reached.
“We have to monitor the situation very closely, but if and when we’ll get a solution, it will be a very interesting opportunity for financials but also European equities in general,” Saxo Bank head of equity strategy Peter Garny said.
The European banking index, the worst sectoral performer since Brexit and so far this year, rose 3.8 percent.
The auto index rose 3.9 percent, making it the biggest sectoral gainer after data showed passenger vehicle sales in China rose 19.4 percent last month.
Germany’s auto-heavy DAX index rose 2.2 percent with BMW, Daimler and Volkswagen gaining 3.6 to 4.3 percent.
Shares in Danish telecoms group TDC jumped more than 9 percent after it said it had rejected a potential takeover approach believed to be from private equity firm Apollo Global Management.
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
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
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Clambering hand-over-hand, sweat dripping into his eyes, a durian laborer expertly slices a cumbersome fruit from a tree before tossing it down to land with a soft thump in his colleague’s waiting arms about 15m below. Among Thailand’s most famous and lucrative exports, the pungent “king of fruits” is as distinctive in its smell as its spiky green-brown carapace, and has been farmed in the kingdom for hundreds of years. However, a vicious heat wave engulfing Southeast Asia has resulted in smaller yields and spiraling costs, with growers and sellers increasingly panicked as global warming damages the industry. “This year is a crisis,”