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.
Shares in Taiwan closed at a new high yesterday, the first trading day of the new year, as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) continued to break records amid an artificial intelligence (AI) boom, dealers said. The TAIEX closed up 386.21 points, or 1.33 percent, at 29,349.81, with turnover totaling NT$648.844 billion (US$20.65 billion). “Judging from a stronger Taiwan dollar against the US dollar, I think foreign institutional investors returned from the holidays and brought funds into the local market,” Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺) said. “Foreign investors just rebuilt their positions with TSMC as their top target,
REVENUE PERFORMANCE: Cloud and network products, and electronic components saw strong increases, while smart consumer electronics and computing products fell Hon Hai Precision Industry Co (鴻海精密) yesterday posted 26.51 percent quarterly growth in revenue for last quarter to NT$2.6 trillion (US$82.44 billion), the strongest on record for the period and above expectations, but the company forecast a slight revenue dip this quarter due to seasonal factors. On an annual basis, revenue last quarter grew 22.07 percent, the company said. Analysts on average estimated about NT$2.4 trillion increase. Hon Hai, which assembles servers for Nvidia Corp and iPhones for Apple Inc, is expanding its capacity in the US, adding artificial intelligence (AI) server production in Wisconsin and Texas, where it operates established campuses. This
H200 CHIPS: A source said that Nvidia has asked the Taiwanese company to begin production of additional chips and work is expected to start in the second quarter Nvidia Corp is scrambling to meet demand for its H200 artificial intelligence (AI) chips from Chinese technology companies and has approached contract manufacturer Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to ramp up production, sources said. Chinese technology companies have placed orders for more than 2 million H200 chips for this year, while Nvidia holds just 700,000 units in stock, two of the people said. The exact additional volume Nvidia intends to order from TSMC remains unclear, they said. A third source said that Nvidia has asked TSMC to begin production of the additional chips and work is expected to start in the second
Garment maker Makalot Industrial Co (聚陽) yesterday reported lower-than-expected fourth-quarter revenue of NT$7.93 billion (US$251.44 million), down 9.48 percent from NT$8.76 billion a year earlier. On a quarterly basis, revenue fell 10.83 percent from NT$8.89 billion, company data showed. The figure was also lower than market expectations of NT$8.05 billion, according to data compiled by Yuanta Securities Investment and Consulting Co (元大投顧), which had projected NT$8.22 billion. Makalot’s revenue this quarter would likely increase by a mid-teens percentage as the industry is entering its high season, Yuanta said. Overall, Makalot’s revenue last year totaled NT$34.43 billion, down 3.08 percent from its record NT$35.52
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