European shares slipped from all-time highs on Friday, as investor sentiment was dulled by underwhelming corporate earnings reports and the rising death toll from the 2019 novel coronavirus outbreak.
The pan-European STOXX 600 fell 0.2 percent, snapping a four-day winning streak, as the number of deaths from the outbreak climbed to 636 and several more companies suspended operations in China.
“We are probably going to see companies caution that sales have been hit as people are not going out to shops to buy and that is going to ripple through,” CMC Markets market analyst David Madden said.
British fashion brand Burberry Group PLC fell 1.8 percent after flagging a slide in demand from China and Hong Kong due to the outbreak.
China-exposed sectors, such as basic materials, luxury and auto stocks, which have seesawed over the past two weeks on virus fears, were the biggest decliners on the day.
Sentiment this week had so far been buoyed by a spate of strong earnings updates and China’s attempts to limit the economic fallout of the outbreak, helping the main index recover from a 3 percent slump last week.
Despite Friday’s declines, the STOXX 600 posted its best week since December 2016 with a 3.3 percent increase.
Swiss lender Credit Suisse Group AG slumped 3.6 percent on Friday after its chief executive officer Tidjane Thiam stepped down following a spying scandal.
Miner Norsk Hydro ASA tumbled 10 percent after missing quarterly profit estimates, while Belgian materials and recycling group Umicore SA fell after an RBC downgrade to “hold.”
Economic data from the bloc this week had raised hopes that a slowdown might be bottoming out, but latest numbers showed German industrial output registered its biggest drop in more than a decade in December last year.
“The data has raised the risk that next week’s GDP data could bring back the R-word for the German economy,” said Carsten Brzeski, Germany chief economist at ING, referring to fears of a looming recession.
Cosmetics maker L’Oreal SA and fertilizer maker Yara International ASA rose 6.7 percent and 4.9 percent respectively after posting better-than-expected quarterly profits.
Technology firm Ericsson AB topped the pan-regional index after majority owner Cevian Capital said a US interest in buying a stake would be positive, following comments from the US Attorney General on Thursday that the country should consider taking a “controlling stake” in the company.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts