European stocks on Friday rebounded after three days of declines as better-than-expected Chinese data helped ease investor concerns over global growth and the health of the world’s second-biggest economy.
The STOXX 600 Index climbed 1.3 percent at the close of trading, its biggest gain since Sept. 22. The equity gauge rose 0.1 percent this week, halting a two-week losing streak.
Friday’s increase pushed it above its 100-day moving average after it dipped below in the past two days. Gains were helped as forecast-beating results from Citigroup Inc and JPMorgan Chase & Co alleviated some concerns about the strength of US earnings.
Italian banks led lenders to the biggest advance on the STOXX 600, with Banco Popolare SC and Banca Popolare di Milano Scarl rising 6.1 percent or more on optimism that shareholders will this weekend back their merger.
Rio Tinto Group and BHP Billiton Ltd contributed the most to gains among miners.
Anglo American PLC added 1.6 percent after people with knowledge of the matter said Apollo Global Management LLC and Xcoal Energy & Resources LLC are poised to buy its Australian metallurgical coal assets.
“The fall yesterday [Thursday] was a little too vigorous, so we are getting a bounce back,” said Frances Hudson, a global thematic strategist at Standard Life Investments in Edinburgh. “Following the data on producer prices, we are getting a strong performance from miners today. At a market level, we seem to be traveling optimistically with regards to earnings in Europe.”
Data on Friday showing that China’s producer prices rose for the first time since 2012, as well as higher-than-estimated inflation, offered a more encouraging outlook for the country.
European stocks have yet to fully recover from a slide at the start of the year precipitated by anxiety over a Chinese slowdown.
Anxiety about the health of corporate Europe has also weighed on equities.
More than 150 members in the STOXX 600 are reporting earnings this month, with analysts forecasting a profit decline of 4.2 percent this year for the index’s constituents.
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
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Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) quarterly sales topped estimates, reinforcing investor hopes that the torrid pace of artificial intelligence (AI) hardware spending would extend into this year. The go-to chipmaker for Nvidia Corp and Apple Inc reported a 39 percent rise in December-quarter revenue to NT$868.5 billion (US$26.35 billion), based on calculations from monthly disclosures. That compared with an average estimate of NT$854.7 billion. The strong showing from Taiwan’s largest company bolsters expectations that big tech companies from Alphabet Inc to Microsoft Corp would continue to build and upgrade datacenters at a rapid clip to propel AI development. Growth accelerated for
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