Signs that Europe’s recovery is struggling and investors rushing to sell company stakes put a halt to this week’s rally in European shares.
Polymetal International PLC sank 7.4 percent after two investors said they would sell 13 million shares of the miner.
Moncler SpA, the Italian maker of luxury skiwear, dropped 2.2 percent and Scout24 AG, a German operator of online classifieds businesses, fell 4.1 percent after shareholders also sold a stake.
CaixaBank SA lost 3.8 percent, helping send lenders to the biggest decline among sectors, after it sold shares for 1.3 billion euros (US$1.5 billion) to fund its takeover of Portugal’s Banco BPI SA.
“It may well signal a more cautious stance,” said Ralf Zimmermann, a strategist at Bankhaus Lampe in Dusseldorf, Germany. “Drivers for a sustainable increase in stock prices would be a reasonable acceleration in the business and earnings cycle, but we don’t see that happening in the short term, so we’re stuck in a broader sideways-trading range.”
European equities trimmed their biggest weekly advances since July, with almost all industry groups falling, as skepticism about the recovery resurfaced. A monthly composite purchasing managers index slumped to a 20-month low, and economic data are back to missing forecasts.
The STOXX Europe 600 Index lost 0.7 percent on Friday and a Bank of America Corp report showed fund managers have withdrawn money from the region’s equities for a 33rd straight week, extending a record streak of outflows.
While the STOXX 600 rallied 3 percent in the past four days as the US Federal Reserve kept borrowing costs unchanged and the Bank of Japan said it would adjust its asset buying to control bond yields, European equities have been stuck in a tight trading range.
Since the end of May, the benchmark gauge’s 100-day moving average has been hovering around the same level.
The European index is down 5.6 percent this year, while peers in the US and Asia have climbed more than 6 percent. The region’s lenders have led the declines amid growing worries about profitability in a low-rate environment, while legal costs mount and Italy might face a banking crisis.
On Friday, European lenders fell from an almost two-week high, with Spanish firms leading the losses.
Banco Santander SA dropped 3.3 percent, its biggest slide since Aug. 2, while Banco de Sabadell SA lost 4.2 percent. Deutsche Bank AG, down 2 percent and trading near a record low, has been in focus after the US sought US$14 billion to settle claims related to the sale of mortgage-backed securities, and German politicians are increasingly concerned about the company’s finances.
Banks pushed Spain’s IBEX 35 Index 1.3 percent lower, while benchmark gauges of Italy and Portugal declined more than 0.7 percent. The OMX Copenhagen 20 CAP Index lost 1.5 percent, with drugmaker H. Lundbeck A/S sinking 15 percent, the most since 2009.
The company said a treatment for Alzheimer’s disease failed the first of three pivotal studies. Germany’s DAX slipped 0.4 percent after its biggest jump since Aug. 9, with Deutsche Bank falling the most. The UK’s FTSE 100 Index was little changed.
While Royal Bank of Scotland Group PLC and Lloyds Banking Group PLC fell more than 2 percent, homebuilders climbed after Liberum upgraded the sector’s price estimates.
Sports Direct International PLC rallied 5.5 percent after saying founder Mike Ashley would take over as chief executive officer, replacing Dave Forsey.
Among other stocks moving, Nestle SA declined 1.7 percent as analysts said a company presentation on Thursday suggested that organic sales growth might be lower than expected. Swiss food maker Aryzta AG jumped 9.9 percent after saying Gary McGann, chairman of Paddy Power Betfair PLC, would join its board as chairman. Moleskin SpA jumped a record 16 percent after Belgium’s D’Ieteren SA said it would make an offer to buy the Italian lifestyle company.
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
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