Signs that Europe’s recovery is struggling and investors rushing to sell company stakes put a halt to this week’s rally in European shares.
Polymetal International PLC sank 7.4 percent after two investors said they would sell 13 million shares of the miner.
Moncler SpA, the Italian maker of luxury skiwear, dropped 2.2 percent and Scout24 AG, a German operator of online classifieds businesses, fell 4.1 percent after shareholders also sold a stake.
CaixaBank SA lost 3.8 percent, helping send lenders to the biggest decline among sectors, after it sold shares for 1.3 billion euros (US$1.5 billion) to fund its takeover of Portugal’s Banco BPI SA.
“It may well signal a more cautious stance,” said Ralf Zimmermann, a strategist at Bankhaus Lampe in Dusseldorf, Germany. “Drivers for a sustainable increase in stock prices would be a reasonable acceleration in the business and earnings cycle, but we don’t see that happening in the short term, so we’re stuck in a broader sideways-trading range.”
European equities trimmed their biggest weekly advances since July, with almost all industry groups falling, as skepticism about the recovery resurfaced. A monthly composite purchasing managers index slumped to a 20-month low, and economic data are back to missing forecasts.
The STOXX Europe 600 Index lost 0.7 percent on Friday and a Bank of America Corp report showed fund managers have withdrawn money from the region’s equities for a 33rd straight week, extending a record streak of outflows.
While the STOXX 600 rallied 3 percent in the past four days as the US Federal Reserve kept borrowing costs unchanged and the Bank of Japan said it would adjust its asset buying to control bond yields, European equities have been stuck in a tight trading range.
Since the end of May, the benchmark gauge’s 100-day moving average has been hovering around the same level.
The European index is down 5.6 percent this year, while peers in the US and Asia have climbed more than 6 percent. The region’s lenders have led the declines amid growing worries about profitability in a low-rate environment, while legal costs mount and Italy might face a banking crisis.
On Friday, European lenders fell from an almost two-week high, with Spanish firms leading the losses.
Banco Santander SA dropped 3.3 percent, its biggest slide since Aug. 2, while Banco de Sabadell SA lost 4.2 percent. Deutsche Bank AG, down 2 percent and trading near a record low, has been in focus after the US sought US$14 billion to settle claims related to the sale of mortgage-backed securities, and German politicians are increasingly concerned about the company’s finances.
Banks pushed Spain’s IBEX 35 Index 1.3 percent lower, while benchmark gauges of Italy and Portugal declined more than 0.7 percent. The OMX Copenhagen 20 CAP Index lost 1.5 percent, with drugmaker H. Lundbeck A/S sinking 15 percent, the most since 2009.
The company said a treatment for Alzheimer’s disease failed the first of three pivotal studies. Germany’s DAX slipped 0.4 percent after its biggest jump since Aug. 9, with Deutsche Bank falling the most. The UK’s FTSE 100 Index was little changed.
While Royal Bank of Scotland Group PLC and Lloyds Banking Group PLC fell more than 2 percent, homebuilders climbed after Liberum upgraded the sector’s price estimates.
Sports Direct International PLC rallied 5.5 percent after saying founder Mike Ashley would take over as chief executive officer, replacing Dave Forsey.
Among other stocks moving, Nestle SA declined 1.7 percent as analysts said a company presentation on Thursday suggested that organic sales growth might be lower than expected. Swiss food maker Aryzta AG jumped 9.9 percent after saying Gary McGann, chairman of Paddy Power Betfair PLC, would join its board as chairman. Moleskin SpA jumped a record 16 percent after Belgium’s D’Ieteren SA said it would make an offer to buy the Italian lifestyle company.
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