Some strong earnings helped European stocks end higher on Friday, but they posted their sharpest weekly and monthly declines since a brutal sell-off in March, as a new round of COVID-19 lockdowns dampened prospects for a sustained economic recovery.
Gains in energy major Total SA and some Spanish banks after upbeat results boosted the pan-European index, which finished a volatile session up 0.2 percent.
Data showing the eurozone economy rebounded more strongly than expected also helped prop up markets, but fears that the recovery would be cut short as countries reintroduce restrictions to stem a second wave of the COVID-19 pandemic kept gains in check.
With Spain, one of Europe’s worst COVID-19 hotspots, declaring a state of emergency until early May next year, and Germany and France reimposing tight restrictions this week, the STOXX 600 lost more than 5 percent on the week, pushing the monthly performance into negative territory.
“After the drubbing it took earlier in the week, Europe is managing to avoid any bigger losses,” said Chris Beauchamp, chief market analyst at online trader IG.
“Better GDP figures might be helping ... but it is more likely due to a grateful realization that even if Q4 is absolutely dire, the ECB [the European Central Bank] will be along in due course with some form of rescue program,” he said.
On Thursday, the ECB gave its clearest signal yet that it would ease policy next month to help the economy through the health crisis.
Heading into the week of US presidential elections, a slide in Wall Street’s big tech stocks after earnings overnight also weighed on global sentiment, with Europe’s tech sector slipping 0.5 percent.
Apple Inc suppliers ASM International NV, Dialog Semiconductor PLC and STMicroelectronics NV fell 1.2 percent to 1.7 percent after the late launch of Apple’s new 5G iPhones caused customers to put off buying new devices.
Spain’s blue-chip IBEX was supported by better-than-expected earnings from lenders Banco Sabadell SA and BBVA SA.
French oil and gas producer Total rose 2.8 percent after it maintained its dividend.
Third-quarter earnings season has been largely supportive, with 74 percent of the nearly half the STOXX 600 companies that reported so far topping profit estimates, according to Refinitiv data.
However, video game maker Ubisoft SA slipped to the bottom of the STOXX 600 after it cut its outlook for the year as the COVID-19 pandemic delayed the production of blockbuster games Far Cry 6 and Rainbow Six Quarantine.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San