European stocks rose the most in six months this week, as investors speculated that Japan will prevent further radiation leaks from its stricken nuclear plant and the US economy grew at a faster-than-forecast pace.
The benchmark STOXX Europe 600 Index gained 3.1 percent this past week for the biggest advance since September last year. The gauge had declined for four consecutive weeks amid concern that revolts in the Middle East and North Africa will further disrupt oil supplies and after Japan suffered its strongest earthquake on record. The gauge has recouped 5.3 percent since this year’s low on March 16.
“The impact on financial markets of the natural catastrophe in Japan was not as dramatic as people feared and valuations are currently too attractive for investors to ignore,” said Kai Fachinger, who manages a fund worth 600 million euros (US$849 million) for SAM Sustainable Asset Management AG in Zurich. “Still, Portugal’s debt problem is an issue that will return to haunt markets.”
The STOXX 600 Index is -trading at about 13.5 times its companies’ reported earnings, near the gauge’s cheapest multiple since 2009, according to data compiled by Bloomberg.
Stocks extended their gains as Portugal’s Prime Minister Jose Socrates offered to resign after parliament rejected his package of cuts to government spending. Investors speculated that Socrates’ defeat would force the country to ask the EU for a bailout. Two European officials with direct knowledge of the matter said Portugal may need as much as 70 billion euros.
In Germany, business confidence fell less than economists had predicted from a record high. The Munich-based Ifo institute said its business-climate index, based on a survey of 7,000 executives, declined to 111.1 from 111.3 last month, which was the highest reading since records for a reunified Germany began in 1991. Economists had predicted a drop to 110.5, according to the median of 39 forecasts in a Bloomberg News survey.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
PROJECTION: TSMC said it expects strong growth this year, with revenue in US dollars projected to grow by about 30 percent, outperforming the industry Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported consolidated sales last month reached NT$317.66 billion (US$9.98 billion), the highest ever for the month of February, driven by robust demand for chips built using the company’s advanced 3-nanometer (3nm) process. Last month’s figure was up 22.2 percent from a year earlier, but fell 20.8 percent from January, the world’s largest contract chipmaker said in a statement. For the first two months of the year, TSMC posted cumulative sales of NT$718.91 billion, up 29.9 percent from a year earlier. Analysts attributed the growth to sustained global demand for artificial intelligence (AI) products
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