European shares closed higher on Friday after hitting one-month highs as investor appetite for assets considered risky remained firm, despite caution over trade and ahead of earnings season.
The pan-European STOXX 600 ended 0.1 percent higher on its fourth straight day in the black — its longest winning streak since November.
However, Frankfurt, Paris and London all ended in negative territory as enthusiasm over China’s trade talks with the US waned without hard evidence about what was agreed.
Worries about slowing economic growth in China also lingered, while Wall Street’s gains from a rally on Thursday faltered as corporate results season starts in earnest next week.
“The lack of additional detail in relation to the update [on US-China trade talks] has encouraged some dealers to trim their positions ahead of the weekend,” said David Madden, market analyst at CMC Markets UK.
China-sensitive autos and parts suppliers led the falls, down 1 percent.
Valeo Group dropped 6.4 percent, the biggest faller on France’s CAC 40, while Continental AG and Volkswagen AG were among the biggest DAX decliners.
Still in the first full trading week of this year, the STOXX 600 gained 1.7 percent as investors regained their appetite for risk boosted by dovish comments from US Federal Reserve Chairman Jerome Powell.
Equity funds drew inflows of US$6.2 billion, the biggest in 11 weeks, Bank of America Merrill Lynch said.
Britain’s FTSE 100 erased earlier gains as sterling bounced amid growing expectations that the government might delay its departure from the EU beyond March 29.
Focus remained on British Prime Minister Theresa May’s efforts to get her Brexit deal through parliament, with a crucial vote due on Tuesday.
A drastic about-turn in crude prices also weighed on heavyweight oil stocks.
In the healthcare sector, downgrades by Jefferies Group LLC hit UDG Healthcare PLC and Orion Oyj, which were the worst individual performers with falls of 7.7 percent 7.4 percent respectively.
French utilities took a hit after Societe Generale SA downgraded ratings on Suez SA and Veolia Environnement SA, citing doubts about the global growth outlook. The stocks were down 2.8 percent and 2.6 percent respectively.
The UK’s housebuilders were stand-out gainers on the day after Bank of America Merrill Lynch upgraded its view on the sector, saying “it seems at least possible, or even probably, that some sort of Brexit resolution is within sight and therefore the UK housebuilding sector may see some relief.”
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
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.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
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