On Friday the mood is turned decidedly upbeat in the European market, with glimmers of hope for two sagas that have plagued European stocks this year — trade talks and Brexit.
As the week began, equities were coming off the worst slump since August, the trade dispute was heating up with the US blacklisting Chinese tech giants, and British Prime Minister Boris Johnson had deemed a Brexit agreement by the end of the month “essentially impossible.”
Fast forward to Friday, and equities are poised for their biggest weekly rally since mid-March.
The Stoxx Europe 600 Index jumped the most since January. It closed at 391.61 on Friday, an increase of 2.3 percent for the day and a 3 percent increase for the week.
The coming days will confirm whether investors’ optimism is warranted, and provide catalysts for further stock market moves.
“The slightest glimmer of hope literally gives the stock market wings and all worries and crises seem to have been forgotten,” said Andreas Lipkow, strategist at Comdirect Bank.
“It remains to be seen if the very high expectations can be met. As after any big party, the headache on the following morning can be equally painful,” Lipkow said.
The gains were even more pronounced for UK-domestic stocks, boosted by hopes the UK might reach a deal with the EU on Brexit.
The pound has been surging since Irish Prime Minister Leo Varadkar on Thursday said that he believed an agreement was possible by the Oct. 31 deadline, following two-and-a-half hours of “constructive” talks with Johnson.
On Friday, EU Chief Negotiator Michel Barnier recommended that detailed talks could begin in earnest.
The FTSE 250 was up 4.2 percent on Friday at 20,041.71 and 2.9 percent for the week, with Royal Bank of Scotland Group PLC jumping 16 percent and Marks & Spencer Group PLC climbing 11 percent.
The FTSE 100, home of multinationals such as BP PLC and GlaxoSmithKline PLC, was up 0.8 percent at 7,247.08, hurt by the rally in the pound. It posted a 1.3 percent increase for the week.
“What we see today is mostly short-covering in cyclical sectors and financials,” said Markus Steinbeis, managing director at asset manager Steinbeis & Haecker in Munich.
The rally could last for a little while, given the attractive valuations and the significant underweight in these value stocks among investors, Steinbeis added.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last