Large-cap companies on Friday pulled European stocks higher as a surge in the UK’s Vodafone Group PLC and strong earnings for media businesses and Nestle SA spurred recovery from a sell-off driven by the European Central Bank (ECB).
The pan-European benchmark index rose 0.3 percent, bouncing back from its worst session in three weeks.
London’s FTSE 100 outperformed European peers with a 0.8 percent advance, helped by telecoms companies.
Vodafone gained 10.6 percent to record it strongest performance since late 2002 on plans to separate its towers unit in Europe into a new company worth upwards of 18 billion euros (US$20 billion) with a view to a potential stock market listing.
The STOXX 600 telecoms index rose 2.3 percent as shares of Cellnex Telecom SA, Europe’s biggest towers group, gained 3.3 percent and Telecom Italia SpA rose 4.1 percent after Vodafone agreed to jointly roll out 5G in Italy and merge their mobile mast operations.
However, media stocks led the gains after upbeat results from France’s Vivendi SA, satellite operator SES and education company Pearson Education.
Another blue-chip stock to perform well was Nestle, which rose nearly 2 percent after posting its fastest quarterly sales growth in three years.
“There has been a more positive set of corporate earnings since yesterday’s close and chiefly Vodafone,” City Index Group analyst Ken Odeluga said.
European shares took a beating on Thursday after ECB President Mario Draghi all but pledged to ease monetary policy further and even hinted at a reinterpretation of the bank’s inflation target, but disappointed some investors who had hoped for an immediate cut to interest rates.
Despite Thursday’s blip, the main STOXX index posted a 0.8 percent gain on the week, driven partly by hopes of policy easing from the ECB as economic data point to a worsening outlook for Europe’s already slowing economy.
“There is a bit of reassessment and the market has attracted some buyers back due to the big selling yesterday,” Odeluga said.
“We also had the US GDP [data], which was not as bad as expected and allows investors to go into the weekend with a bit more positive sentiment,” he said.
US data showed that economic growth slowed less than expected in the second quarter, although it did little to deter expectations that the US Federal Reserve will cut interest rates by 25 basis points next week.
Among the weak spots, Banco Sabadell SA and CaixaBank SA fell more than 6.5 percent.
Luxury stock Kering SA slumped 7 percent as its main Gucci brand reported a slower-than-expected rise in second-quarter sales, hit by a blip in the US.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The
RECORD LOW: Global firms’ increased inventories, tariff disputes not yet impacting Taiwan and new graduates not yet entering the market contributed to the decrease Taiwan’s unemployment rate last month dropped to 3.3 percent, the lowest for the month in 25 years, as strong exports and resilient domestic demand boosted hiring across various sectors, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. After seasonal adjustments, the jobless rate eased to 3.34 percent, the best performance in 24 years, suggesting a stable labor market, although a mild increase is expected with the graduation season from this month through August, the statistics agency said. “Potential shocks from tariff disputes between the US and China have yet to affect Taiwan’s job market,” Census Department Deputy Director Tan Wen-ling
RSS