European stocks fell for a second week, for the biggest loss since June, amid concern any military action by the US against Syria may escalate into a larger conflict in the Middle East and push up oil prices.
The STOXX Europe 600 Index declined 2.4 percent to 297.32 this week, ending last month with only the second monthly loss since May last year.
The equity benchmark has still rallied 7.9 percent from this year’s low on June 24, as the European Central Bank and the Bank of England pledged to keep interest rates low.
“Syria was a key factor in driving markets lower this week as the threat of a military intervention and the threat of a spike in oil prices tend to be a bad combination for equity investors,” said Andreas Nigg, head of equity and commodity strategy at Vontobel Asset Management in Zurich. “We had a nice summer rally and we are entering the weakest seasonal period from an equity perspective.”
The VSTOXX Index, a gauge of expected volatility in euro-area stocks based on options prices, posted the second-biggest weekly increase since November 2011, jumping 32 percent.
National benchmark indices dropped in all of the 18 Western European markets. Germany’s DAX declined 3.7 percent. The UK’s FTSE 100 slipped 1.2 percent. France’s CAC 40 lost 3.3 percent.
The US Federal Reserve will hold a policy meeting on Sept. 17 and 18 to decide whether to slow the pace of its bond-purchase program. Fed Chairman Ben Bernanke said in May and June that the central bank may consider tapering if the employment outlook improved substantially and the economy grows as forecast.
The issue of the US’ statutory debt ceiling resurfaced with the US Treasury Department saying the nation would exhaust its borrowing limit of US$16.699 trillion in the middle of next month. Congressional Republicans and US President Barack Obama’s administration are gearing up for battles starting early this month over federal spending and borrowing.
ThromboGenics NV plunged 25 percent after its sales forecast missed analysts’ estimates. Serco Group PLC tumbled 12 percent as some of its staff members came under investigation for suspected fraudulent behavior. Vodafone Group PLC jumped 7.6 percent after confirming talks with Verizon Communications Inc to sell its 45 percent stake in Verizon Wireless.
Contract chipmaker United Microelectronics Corp (UMC, 聯電) yesterday said it has signed a memorandum of understanding (MOU) with Polar Semiconductor LLC to collaborate on the production of 8-inch wafers in the US. The collaboration aims to strengthen 8-inch wafer manufacturing in the US amid Washington’s efforts to increase onshore manufacturing of semiconductors, contribute to supply chain resilience against shifting geopolitical dynamics, and ensure a secure domestic supply of power semiconductors critical to automotive, electric grids, robotic manufacturing and data centers, the companies said in a joint statement. Under the MOU, Polar and UMC will identify devices for Polar to manufacture at
TECH TITANS: Amazon’s latest chip joins Google in competing for the 90 percent market share held by Nvidia, which claims it is ‘a generation ahead of the industry’ Amazon Web Services (AWS) on Tuesday launched its in-house-built Trainium3 artificial intelligence (AI) chip, marking a significant push to compete with Nvidia Corp in the lucrative market for AI computing power. The move intensifies competition in the AI chip market, where Nvidia dominates with an estimated 80 to 90 percent market share for products used in training large language models that power the likes of ChatGPT. Google last week caused tremors in the industry when it was reported that Facebook-parent Meta Platforms Inc would employ Google AI chips in data centers, signaling new competition for Nvidia. This followed the release last month of
Two companies wholly owned by the daughter of the founder of Hon Hai Precision Industry Co (鴻海精密) on Monday reported to the Taiwan Stock Exchange that they would dispose of all of the Hon Hai shares they hold. In filings with the exchange, Hong Wei Investment Co (鋐維) said it would sell the 2.771 million Hon Hai shares it holds and Frontier Investment Corp (承鋒投資) said it would sell its 2.409 million Hon Hai shares from tomorrow until Jan. 3 next year. The two companies are wholly owned and chaired by Shirley Gou (郭曉玲), the eldest daughter of Hon Hai founder Terry
TARIFF TALKS: The US secretary of commerce is eyeing more than US$300 billion in investments and said Taiwan would train US workers, but Taipei has denied the latter US Secretary of Commerce Howard Lutnick said the US is expecting a large investment pledge from Taiwan in trade talks, while President William Lai (賴清德) listed areas that need improvement in order for projects to be completed. “We’re in the midst of discussions,” Lutnick said on Wednesday. “But the fact is, this administration’s goal is to bring semiconductor manufacturing to America.” Lai on Wednesday said Taiwan is supportive of US President Donald Trump’s goal of reindustrializing the US, including efforts to ramp up semiconductor production. Such a goal would require the US to reduce its reliance on Taiwan as a key source
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