European stocks climbed for a seventh straight week, the longest winning streak in more than six years, as better-than-expected earnings offset concern that the euro area crisis is deepening.
The STOXX Europe 600 Index climbed 0.8 percent to 258.17 this week, for the longest stretch of gains since January 2006, even after falling 1.4 percent on Friday. The gauge has rebounded 10 percent from this year’s low on June 4 as central banks from Europe to China eased monetary policy to help spur economic growth.
“Investors have been given the rare opportunity to focus on companies as the earnings reporting season continued to filter through,” said Simon Reynolds, a fund manager at Octopus Investments in London. “Upbeat US earnings have helped lift equity markets.”
Of the 46 companies on the STOXX 600 that have reported earnings this quarter, 48 percent beat forecasts, according to data compiled by Bloomberg. On the Standard & Poor’s 500 Index, 73 percent of the 118 companies that have reported quarterly earnings have topped analyst estimates, the data show.
National benchmark indexes rose in 11 of the 18 western European markets this week. Germany’s DAX rallied 1.1 percent, France’s CAC 40 advanced 0.4 percent and Switzerland’s SMI gained 1.7 percent. The UK’s FTSE 100 lost 0.3 percent, while Spain’s IBEX 35 fell 6.3 percent and Italy’s FTSE MIB retreated 4.7 percent.
European stocks dropped on Friday, paring their weekly advance, as the yield premium for Spanish benchmark bonds over German bunds surged to a record. Spanish bonds declined, pushing the extra yield investors demand to hold the nation’s 10-year securities instead of similar-maturity German bunds to the most on record.
Spain’s recession will extend into next year as the region of Valencia prepared to seek a rescue from the central government and European finance ministers approved the bailout of Spanish banks, Spanish Budget Minister Cristobal Montoro said after the Cabinet met on Friday in Madrid. GDP will fall 0.5 percent next year instead of rising 0.2 percent as the government predicted on April 27, Montoro said.
ASML surged 9.7 percent after the chipmaker said second- quarter net bookings climbed 9.8 percent and that technological advances will boost business in the longer term.
Akzo Nobel jumped 10 percent. The company reported second-quarter earnings ahead of analyst forecasts as chief executive officer Ton Buechner drives ahead with a revamp to improve profitability.
SEB, the second-largest lender in the Baltic countries, and Nordea Bank AB, the Nordic region’s biggest bank, also reported earnings that topped analysts’ estimates. The shares gained 8 percent and 2.1 percent respectively.
Remy Cointreau SA increased 6.1 percent in Paris as France’s second-biggest distiller reported an increase in first-quarter sales that also topped projections.
CSR PLC surged 37 percent after Samsung Electronics Co agreed to buy its wireless technology unit for US$310 million.
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
A proposed 100 percent tariff on chip imports announced by US President Donald Trump could shift more of Taiwan’s semiconductor production overseas, a Taiwan Institute of Economic Research (TIER) researcher said yesterday. Trump’s tariff policy will accelerate the global semiconductor industry’s pace to establish roots in the US, leading to higher supply chain costs and ultimately raising prices of consumer electronics and creating uncertainty for future market demand, Arisa Liu (劉佩真) at the institute’s Taiwan Industry Economics Database said in a telephone interview. Trump’s move signals his intention to "restore the glory of the US semiconductor industry," Liu noted, saying that
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
STILL UNCLEAR: Several aspects of the policy still need to be clarified, such as whether the exemptions would expand to related products, PwC Taiwan warned The TAIEX surged yesterday, led by gains in Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), after US President Donald Trump announced a sweeping 100 percent tariff on imported semiconductors — while exempting companies operating or building plants in the US, which includes TSMC. The benchmark index jumped 556.41 points, or 2.37 percent, to close at 24,003.77, breaching the 24,000-point level and hitting its highest close this year, Taiwan Stock Exchange (TWSE) data showed. TSMC rose NT$55, or 4.89 percent, to close at a record NT$1,180, as the company is already investing heavily in a multibillion-dollar plant in Arizona that led investors to assume
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