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The STOXX Europe 600 Index lost 0.7 percent on Friday and a Bank of America Corp report showed fund managers have withdrawn money from the region’s equities for a 33rd straight week, extending a record streak of outflows.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.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
PROJECTION: TSMC said it expects strong growth this year, with revenue in US dollars projected to grow by about 30 percent, outperforming the industry Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported consolidated sales last month reached NT$317.66 billion (US$9.98 billion), the highest ever for the month of February, driven by robust demand for chips built using the company’s advanced 3-nanometer (3nm) process. Last month’s figure was up 22.2 percent from a year earlier, but fell 20.8 percent from January, the world’s largest contract chipmaker said in a statement. For the first two months of the year, TSMC posted cumulative sales of NT$718.91 billion, up 29.9 percent from a year earlier. Analysts attributed the growth to sustained global demand for artificial intelligence (AI) products
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