European shares ended flat on Friday as surging COVID-19 cases compounded fears of the damage to the bloc’s economy in the coming winter months, although the benchmark index clocked its second straight week of gains.
The pan-European STOXX 600 edged 0.01 percent higher after jumping earlier this week on optimism about a working COVID-19 vaccine.
The index has gained 12.5 percent in the past two weeks, also buoyed by hopes of calmer global trade under US president-elect Joe Biden.
“Even if the greater likelihood of a vaccine has brightened prospects for next year, the near-term economic outlook is still very gloomy,” Capital Economics Ltd Europe economist Jessica Hinds said.
“Much of the eurozone is yet again subject to substantial restrictions on daily life that are taking their toll on economic activity, particularly in parts of the services sector,” Hinds said.
German Minister of Health Jens Spahn said it was too early to say whether restrictions imposed last week would need to be extended beyond this month, while French Prime Minister Jean Castex said there would be no easing for at least two weeks.
German shares rose 0.2 percent, while France’s CAC 40 index gained 0.3 percent after having risen to an eight-month high earlier this week.
Despite rallying more than 40 percent since a coronavirus-driven crash in March, the STOXX 600 is down about 7 percent this year on concerns that the second round of lockdowns would threaten a nascent economic recovery.
The S&P 500, in contrast, has risen 9.5 percent so far this year.
With the eurozone likely heading back into recession this quarter, the European Central Bank has already said it would provide more stimulus next month.
European banking stocks outperformed major sectors surged 16.5 percent this week, while travel stocks, which have lost 25 percent of their value so far this year, ended their second week higher.
Technology stocks, which have tracked a surge in their US peers as investors gravitate toward sectors that have seen higher demand in this year’s stay-at-home environment, gained 0.3 percent on Friday.
French power group EDF SA gained 0.4 percent as it showed signs of improving performance in the third quarter, while German property group Deutsche Wohnen AG fell 1 percent after its third-quarter earnings update.
Overall, quarterly results for STOXX 600 companies have been better than expected, with 68 percent of the firms that have reported results so far beating analysts’ earnings estimates, according to Refinitiv data.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure