European stocks rose for a second week, posting the longest monthly winning streak since 2006, after eurozone finance ministers eased the terms of loans to Greece and amid optimism that US lawmakers would reach a budget agreement to avoid the so-called “fiscal cliff.”
The benchmark STOXX 600 climbed 0.9 percent to 275.78 this week, for a monthly gain of 2 percent. The gauge has risen 18 percent from this year’s low on June 4, as the European Central Bank announced an unlimited bond-buying plan and the US Federal Reserve started a third round of asset purchases.
“The market was very focused on the political developments in Washington this week,” said Konstantin Giantiroglou, head of investment advisory at Neue Aargauer Bank in Brugg, Switzerland. “The fiscal-cliff issue will lose some importance going forward. Market participants have to some extent adjusted their expectations concerning the outcome of this political wrangle. An accord will be found at the last minute.”
US President Barack Obama and Republican Speaker of the House John Boehner this week fueled optimism an agreement could be reached to avert more than US$600 billion in spending cuts and tax increases scheduled to begin on Jan. 1.
“In the end, they will work something out, but it could be choppy in the shorter term,” Richard Buckland, Citigroup Inc’s London-based chief global equity strategist, said in a Bloomberg Television interview.
Consumer confidence in the world’s largest economy rose last month to the highest level in more than four years. The Conference Board’s confidence index climbed to 73.7, the highest since February 2008, from a revised 73.1 reading the previous month, a report showed on Tuesday. That exceeded the median forecast of economists that projected a reading of 73.
In Europe, finance ministers eased the conditions on aid for Greece. In the latest bid to keep the 17-nation euro-area intact, they cut the rates on bailout loans, suspended interest payments for a decade on money from the temporary rescue fund, gave the country more time to repay and outlined a Greek bond buyback. They cleared Greece to get a 34.4 billion euro (US$44.7 billion) loan installment this month.
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
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
AI: Softbank’s stake increases in Nvidia and TSMC reflect Masayoshi Son’s effort to gain a foothold in key nodes of the AI value chain, from chip design to data infrastructure Softbank Group Corp is building up stakes in Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the latest reflection of founder Masayoshi Son’s focus on the tools and hardware underpinning artificial intelligence (AI). The Japanese technology investor raised its stake in Nvidia to about US$3 billion by the end of March, up from US$1 billion in the prior quarter, regulatory filings showed. It bought about US$330 million worth of TSMC shares and US$170 million in Oracle Corp, they showed. Softbank’s signature Vision Fund has also monetized almost US$2 billion of public and private assets in the first half of this year,
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
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