European stocks climbed on Friday, amid optimism a resolution to Greek debt talks was close and that the fallout of a potential exit from the euro would be contained. However, the equity gauge still closed down 1 percent this week.
The STOXX Europe 600 Index added 0.4 percent to 385.59 at the close of trading on Friday, paring gains of as much as 1.2 percent.
Greece’s ASE Index rose 0.6 percent on Friday, after earlier adding as much as 2.6 percent, as the European Central Bank (ECB) increased the maximum amount of emergency funding available to Greek lenders.
The benchmark indices of Italy and Ireland rose at least 1.1 percent for the biggest advances in western European markets.
The STOXX 600 reached its lowest level since February on Monday, as talks between Greece and its creditors deteriorated. However, with fears of contagion easing, the benchmark index of European equities reversed losses on Thursday. Greek stocks account for less than 0.1 percent of the STOXX 600.
“Everybody realizes we’re getting close to some sort of resolution,” said Philippe Gijsels, chief strategy officer at BNP Paribas Fortis in Brussels.
“No compromise may mean exit or default, but you have some sort of resolution. Lots of people in the market are ready to buy the dip, and many are buying before the actual event. If you look at Greece, it is a small part of the eurozone. There is some debt, but it is manageable and you also still have the ECB bazooka,” he said.
Greek Prime Minister Alexis Tsipras said he was confident a deal on his country’s finances can be reached at an emergency summit of European leaders tomorrow. The ECB held its own emergency session on Friday.
The expiration of some futures and options on stock and indexes, known as quadruple witching, added to market volatility on Friday.
Fifteen of the 19 industry groups in the STOXX 600 climbed, with travel companies and banks gaining at least 1 percent.
Colt Group SA jumped 20 percent after Fidelity offered to buy the shares it does not already own in the UK business communications provider.
Valeo SA climbed 4.2 percent after the French manufacturer of auto parts announced it bought a 10.5 percent stake in Aledia, which makes LEDs.
Banco BPI SA fell 9.1 percent after CaixaBank SA withdrew its offer for the Portuguese lender as its shareholders rejected a key condition. CaixaBank rose 0.8 percent.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to
The US stock market has been on a tear, yet the country’s economy is in the dumps. So why do so many people believe — undoubtedly incorrectly — that the stock market has decoupled from reality? The economy many people experience, while bleak, is local, personal and, for the most part, either not publicly traded or plays only a small part in the stock market’s moves. To explain why these personal experiences have so little effect on equity markets, we must look more closely at the market role of the weakest industry sectors. The surprising conclusion: The most visible and economically vulnerable