European shares on Friday ended only marginally higher as worries about the stability of Italy’s government dented optimism from renewed signals that the US Federal Reserve would cut interest rates soon.
The pan-European STOXX 600 on Friday edged up 0.45 points, or 0.1 percent, to 387.25 — gaining 0.1 percent from a close of 386.85 on July 12 — after rising as much as 0.7 percent in morning trade, with Italy’s blue-chip stocks falling 2 percent to two-week lows.
Milan-listed banks were the hardest hit on worries that the year-old coalition government might collapse after sparring between the two main political parties and that a new election could take place too late for a new administration to approve next year’s budget.
“The uncertainty surrounding the political situation in Italy remains relatively high, especially with discussions about the budget coming in later in the year,” ING Groep NV senior economist Bert Colijn said. “It is translating into risk for the moment.”
Aiding a strong start for Europe were comments overnight from New York Federal Reserve Bank President John Williams, who said that policymakers could not wait for economic disaster to hit before adding stimulus, reviving expectations of a deeper-than-expected rate cut this month and sparking a rally in shares worldwide.
Markets have fully priced in a 25-basis-point cut by the Fed at a policy meeting next week and expect the European Central Bank to hint at a similar move amid signs global growth is slowing.
Banks, which tend to underperform in a falling interest rate environment, fell about 0.8 percent, the worst-performing sector on the STOXX 600.
Poor earnings over the past two sessions had threatened to take the index lower on the week, but Friday’s gains helped the STOXX end the week higher for the sixth time in seven weeks.
Trade-sensitive stocks of technology companies and automakers got a lift after US Secretary of the Treasury Steven Mnuchin suggested in-person talks between US and Chinese officials could follow after telephone conversations on Thursday.
Industrial stocks were the top gainers as shares in German payments company Wirecard AG jumped 5.5 percent after it signed an agreement with supermarket chains ALDI Nord and ALDI Sued to process card payments.
Sweden’s AB Volvo rose 5.5 percent, recovering from a slide on Thursday after the auto and truck maker announced cost-cutting measures to counter the effects of tariffs.
Belgium-based Budweiser owner Anheuser-Busch InBev SA/NV also jumped 5.5 percent, keeping the eurozone’s blue-chip index afloat, after the debt-heavy brewer said that it would sell its Australian operations to Japan’s Asahi Group Holdings Ltd and was still interested in reviving the stalled flotation of its Asian business.
Media shares were a weak spot, sliding 0.5 percent on Publicis Groupe’s 6 percent drop after the advertising group cut its revenue growth guidance for this year.
TV and online retailer Momo.com Inc (富邦媒體) yesterday said it has set up a new logistics subsidiary, Fu Sheng Logistics Co (富昇物流), to oversee the company’s extensive shipping operations. Leveraging Momo’s 23 satellite warehouses and distribution centers nationwide, Fu Sheng will be in charge of executing the retailer’s same-day shipment plan for deliveries in Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung, Momo said in a press release. Seeking to further shorten its supply chain, the company is to set up another seven satellite warehouses and distribution centers by the end of the year. “Fu Sheng has a fleet of 200 couriers
‘ACCORDING TO PLAN’: A company official said that it has set up production sites worldwide to provide services and that its Wisconsin project was going smoothly Hon Hai Precision Industry Co’s (鴻海精密) smart manufacturing center in Wisconsin would begin trial manufacturing in the middle of this year, the company said yesterday, adding that it plans to build a research institute to develop key technologies to support growth over the next five years. Hon Hai, known internationally as Foxconn Technology Group (富士康科技集團), said in an annual report submitted to the Taiwan Stock Exchange that its planned Foxconn Institute for Research in Science and Technology would conduct research into artificial intelligence, next-generation communications, quantum computing, cybersecurity and nano semiconductors in Taiwan. Hon Hai is to make products at the center
US-CHINA TENSIONS: The company said that it supplies self-designed chips to the Chinese company and, as such, is not affected by the latest US export restrictions Macronix International Co (旺宏電子) said it does not expect its shipments of memory chips to Huawei Technologies Co (華為) to be affected by the latest US export restrictions on the Chinese tech giant. “As long as the company [Huawei] places orders, we will ship [chips], unless the [Taiwanese] government restricts all Taiwanese companies from shipping” to Huawei, Macronix chairman and chief executive officer Miin Wu (吳敏求) said on Monday in Hsinchu. The US Department of Commerce on Friday took a further step to block chip supplies from non-US companies to Huawei by requiring foreign semiconductor makers to get US government permission before
E Ink Holdings Inc (元太科技), the world’s sole supplier of e-paper displays for e-readers and shelf labels, posted its best quarterly net profit for the first quarter in nine years amid increased demand during a traditionally slow season. Net profit soared 80 percent to NT$787 million (US$26.23 million) in the quarter ended March 31, compared with NT$438 million a year earlier. That translated into earnings per share of NT$0.69, up from NT$0.39. E Ink posted lower royalty income of NT$371.23 million last quarter from NT$448.74 million a year earlier, a company financial statement showed. E Ink said that it expects royalty income to