World stock markets on Monday staggered toward the end of their worst year since the global financial crisis a decade ago, rocked by rising interest rates, a global trade dispute and Brexit, dealers said.
London and Paris wobbled in holiday-shortened trade on New Year’s Eve, but nursed dizzying double-digit annual falls after an exceptionally volatile year.
Wall Street gained in the final trading session of the year, but major indices declined for the year, with the Dow shedding 5.6 percent compared to the end of 2017.
Photo: AFP
Equities have been hammered by tighter monetary policy from the US Federal Reserve and the European Central Bank, which last month halted its quantitative easing stimulus policy.
“Global stocks are set for their worst year since the financial crisis, thanks to the tightening monetary policies,” ThinkMarkets chief market analyst Naeem Aslam said.
The Bank of England in August hiked British interest rates for the second time since the financial crisis to help tame inflation, despite worries that Brexit could wreak havoc on the economy.
Sentiment was also dented by US President Donald Trump’s “America first” trade policy, which has sparked a damaging trade dispute with China and others.
“Stock markets have been on a wild ride this year and the United States has been at the center,” Oanda Corp analyst Craig Erlam said.
“Tax reforms hugely boosted earnings, bringing an economic boost with it,” he said.
However, “the trade war with China and skirmishes elsewhere have weighed heavily on the relevant domestic markets, which has dented investor sentiment,” Erlam added.
In Europe on Monday, London’s benchmark FTSE 100 index dipped 0.1 percent to finish at 6,728.13 points, marking a sharp annual loss of 12.5 percent.
The Paris CAC 40 climbed 1.1 percent to end at 4,730.69 points — a drop of nearly 11 percent for the year.
Many investors were away for the Christmas and New Year holidays, while trading hubs including Frankfurt, Rome, Tokyo, Shanghai and Seoul were shut.
Last year “has been characterized by a shift from low volatility, high liquidity and expectations of equity out-performance to high volatility, low liquidity and the return of a bear market in equities,” VTB Capital economist Neil MacKinnon said.
“For 2019, a global economic slowdown — perhaps recession — looks increasingly likely,” he added.
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