Winners and losers among European stocks in the immediate aftermath of US Republican presidential candidate Donald Trump’s election victory swapped places on Friday, sending equities lower.
Industry groups that rallied as Trump defeated his Democratic rival, Hillary Rodham Clinton, lost ground, while those that were punished recovered, on bets the moves went too far.
Construction firms and commodity producers were among the worst decliners, after rallying on Wednesday on optimism of higher infrastructure spending. Drugmakers also fell, after surging on speculation of less regulatory oversight. Bond-proxy sectors, such as utilities and real-estate firms, rebounded from two days of losses.
The STOXX Europe 600 Index fell 0.4 percent at the close after failing to hold opening gains of as much as 0.7 percent. The second daily drop trimmed the benchmark’s biggest weekly rise since July. European equities lost momentum after a three-day rally that broke their longest spell without gains since 1994.
“We’re taking a breather and beginning to think about the wider repercussions of” Trump’s win, said Witold Bahrke, a macro strategist at Nordea Investment Funds in Luxembourg. “You can say this is pro-growth and pro-equity, but it depends hugely on the concrete type of measures he takes. We are moving away from the hope phase to the delivery phase.”
After an initial sell-off prompted by the surprise of Trump’s win wore off, European stocks on Wednesday were boosted by industries seen benefiting from the outcome. Heavyweights like banks and healthcare shares rallied, as did miners and construction. The Republican’s promises to increase public spending also spurred bets for higher inflation, dragging down defensive shares, such as utilities and real estate. The STOXX 600 is up 2.7 percent this week.
Money managers focused on emerging markets fell on Friday amid concern the Federal Reserve would become more aggressive in raising rates under a Trump-led administration. Ashmore Group PLC and Aberdeen Asset Management PLC lost at least 7 percent.
The implications of the vote are “most significant in the emerging markets, which are a dangerous place to be not only in the coming weeks, but probably also the coming months,” Bahrke said. “Partly because of the protectionism tendency in the US policy from now, but also because of the significant rise in the dollar, we might have focused too much on the pro-growth outcome of this election, and not enough on the flip side of the coin — much tighter financial conditions primarily driven by the dollar.”
The STOXX 600 Banks Index fell 0.2 percent, after surging 7.8 percent in the past four days on bets higher inflation would improve profitability and financial rules would ease.
Carmakers were the biggest advancers after Trump selected a prominent critic of global warming to lead his environment agency’s transition team.
RUN IT BACK: A succesful first project working with hyperscalers to design chips encouraged MediaTek to start a second project, aiming to hit stride in 2028 MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it is engaging a second hyperscaler to help design artificial intelligence (AI) accelerators used in data centers following a similar project expected to generate revenue streams soon. The first AI accelerator project is to bring in US$1 billion revenue next year and several billion US dollars more in 2027, MediaTek chief executive officer Rick Tsai (蔡力行) told a virtual investor conference yesterday. The second AI accelerator project is expected to contribute to revenue beginning in 2028, Tsai said. MediaTek yesterday raised its revenue forecast for the global AI accelerator used
TEMPORARY TRUCE: China has made concessions to ease rare earth trade controls, among others, while Washington holds fire on a 100% tariff on all Chinese goods China is effectively suspending implementation of additional export controls on rare earth metals and terminating investigations targeting US companies in the semiconductor supply chain, the White House announced. The White House on Saturday issued a fact sheet outlining some details of the trade pact agreed to earlier in the week by US President Donald Trump and Chinese President Xi Jinping (習近平) that aimed to ease tensions between the world’s two largest economies. Under the deal, China is to issue general licenses valid for exports of rare earths, gallium, germanium, antimony and graphite “for the benefit of US end users and their suppliers
Dutch chipmaker Nexperia BV’s China unit yesterday said that it had established sufficient inventories of finished goods and works-in-progress, and that its supply chain remained secure and stable after its parent halted wafer supplies. The Dutch company suspended supplies of wafers to its Chinese assembly plant a week ago, calling it “a direct consequence of the local management’s recent failure to comply with the agreed contractual payment terms,” Reuters reported on Friday last week. Its China unit called Nexperia’s suspension “unilateral” and “extremely irresponsible,” adding that the Dutch parent’s claim about contractual payment was “misleading and highly deceptive,” according to a statement
Artificial intelligence (AI) giant Nvidia Corp’s most advanced chips would be reserved for US companies and kept out of China and other countries, US President Donald Trump said. During an interview that aired on Sunday on CBS’ 60 Minutes program and in comments to reporters aboard Air Force One, Trump said only US customers should have access to the top-end Blackwell chips offered by Nvidia, the world’s most valuable company by market capitalization. “The most advanced, we will not let anybody have them other than the United States,” he told CBS, echoing remarks made earlier to reporters as he returned to Washington
RSS