A slide in European bank and energy stocks was exacerbated by hawkish comments from a US Federal Reserve official, which also saw the STOXX 600 index snap a four-week winning streak as fears of US policy tightening came to the fore.
The pan-European STOXX 600 index ended 1.58 percent lower at 452.05 in its worst day in five weeks, with bank and energy stocks leading declines. The index also dropped 1.19 percent this week.
Sentiment was also dented by the EU losing its bid for speedier COVID-19 vaccination deliveries from UK drugmaker AstraZeneca PLC, which could slow the pace of a steady vaccination campaign.
The banking sector, which typically does well when interest rates are high, plunged nearly 3 percent as concerns over an eventual reduction in liquidity saw investors locking in recent gains.
St Louis Fed President James Bullard said the Fed could start tightening rates as soon as late next year, calling it a natural response to economic growth and inflation moving quicker than expected, as the US reopens from the COVID-19 pandemic.
His comments came after the Fed signaled a hawkish tilt earlier this week, which had rattled risk-driven markets.
Commodity markets were also hit by the Fed, with European energy stocks falling 2.9 percent on Friday, in line with lower oil prices.
Basic resources stocks were the worst performers this week, down nearly 8 percent as fears over Chinese caps on copper prices weighed. The sector had its worst week since the peak of the pandemic in March last year.
“The market has been polarized in certain positions,” TS Lombard head of strategy Andrea Cicione said. “We’ve been very positive on financials and energy since last November and now we’re seeing a reversal of that as investors scale back, but this is temporary phase; there’s definitely more upside for financials and energy, which are still relatively cheap.”
London’s FTSE 100 index on Friday marked its worst session in more than a month, dragged by weakness in financial and commodities-linked stocks, while data showed retail sales fell last month as Britons dined out more following a lifting of pandemic restrictions.
The blue-chip FTSE 100 ended 1.9 percent down at 7,017.47 and shed 1.63 percent this week, snapping a win streak of three consecutive weeks in gains.
Banking and life insurance stocks, down 2.7 percent and 2.5 percent respectively, were among the top drags.
Base and precious metal miners, slid 2.4 percent and 0.2 percent respectively, as commodity prices fell, while oil majors BP PLC and Royal Dutch Shell PLC fell 2.7 percent and 3.1 percent respectively, tracking weaker crude.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last