European stocks posted their biggest weekly drop in two months as lawmakers failed to agree on how to contain the eurozone’s debt crisis and Italy’s and Spain’s borrowing costs jumped.
The benchmark STOXX Europe 600 Index dropped 4.6 percent this week as eurozone leaders continued to struggle to stop the sovereign-debt crisis from spreading to the currency zone’s larger economies.
“The macro outlook is currently at the top of the mountain of uncertainty,” said Daniel Weston, a portfolio adviser at Schroeder Equities GmbH. “There is a very foggy view of the political and financial environment, finding it difficult to accurately price in the future.”
German Chancellor Angela Merkel ruled out joint eurozone borrowing and a bigger role for the European Central Bank (ECB) in fighting the debt crisis this week. Backed by Germany, the ECB said asking it to rescue governments would compromise its independence and cause long-term damage to the 17-nation monetary union.
Germany failed to attract sufficient bids at an auction of benchmark 10-year bonds on Wednesday. Europe’s biggest economy failed to reach its maximum sales target of 6 billion euros (US$7.9 billion) at an auction of securities due in January 2022. The securities were sold at a yield of 1.98 percent.
Italy had to pay almost 7 percent to sell six-month bills at an auction on Friday, fanning investor concern that the world’s fourth-biggest borrower may struggle to finance its debt. Spain’s three-month borrowing costs more than doubled at an auction on Tuesday. The ECB has bought Italian and Spanish debt since Aug. 8 in a bid to stem surging borrowing costs.
Benchmark indices dropped in all of the 18 Western European markets. France’s CAC 40 Index fell 4.7 percent, the UK’s FTSE 100 Index lost 3.7 percent and Germany’s DAX tumbled 5.3 percent.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
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