European shares on Friday ended slightly higher thanks to a boost from chipmakers, although increases were capped by weak bank stocks and growing concerns over the Delta variant of SARS-CoV-2.
The pan-European STOXX 600 index rose 0.26 percent to close at 456.81 points, but lost 0.18 percent from a week earlier.
ASML GAINS
Technology stocks rose 1.1 percent, with semiconductor maker ASML Holding NV up 1.4 percent after Micron Technology Inc said that it plans to start using ASML extreme ultraviolet lithography machines in production in 2024, while ASM International NV rose nearly 2.5 percent as it forecast higher order intake in the second quarter.
Bank stocks fell 1.3 percent and were the worst performers, as growing concerns over the new, highly infectious SARS-CoV-2 variant kept investors firmly in fixed income and brought down yields.
Decent US payrolls data also did little to push up borrowing rates. The bank sector lagged its peers for the week with a 2.4 percent loss.
Still, it is the best performing eurozone sector so far this year, as rising inflation expectations had pushed borrowing costs higher earlier in the year.
NEW VIRUS VARIANT
The STOXX 600 ended the week slightly lower as investors feared that the new variant could dent an ongoing economic recovery.
Data showed producer prices in the bloc accelerated more than expected in May on a surge in energy prices.
“Inflation is still clients’ most popular risk to discuss at global level, but considering the European area’s delayed reopening, subdued wage growth and limited fiscal stimulus, the evolution of the Delta variant is a more pressing issue,” TS Lombard senior economist Davide Oneglia wrote in a note.
FTSE 100 UNCHANGED
London’s FTSE 100 ended flat on Friday, dragged by weakness in banks and energy stocks, and posted a weekly loss pressured by concerns over surging COVID-19 infections in the UK.
After gaining as much as 0.52 percent, the blue-chip index FTSE 100 ended 0.03 percent lower at 7,123.27, with banks being the biggest drag. It declined 0.18 percent from a week earlier.
Energy stocks fell 0.8 percent with oil majors BP PLC and Royal Dutch Shell PLC down 1.0 percent and 0.8 percent respectively, tracking weaker crude.
Miners jumped 0.9 percent and were the top gainers, with Anglo American PLC among the top boosts to the blue-chip index.
JITTERS: Nexperia has a 20 percent market share for chips powering simpler features such as window controls, and changing supply chains could take years European carmakers are looking into ways to scratch components made with parts from China, spooked by deepening geopolitical spats playing out through chipmaker Nexperia BV and Beijing’s export controls on rare earths. To protect operations from trade ructions, several automakers are pushing major suppliers to find permanent alternatives to Chinese semiconductors, people familiar with the matter said. The industry is considering broader changes to its supply chain to adapt to shifting geopolitics, Europe’s main suppliers lobby CLEPA head Matthias Zink said. “We had some indications already — questions like: ‘How can you supply me without this dependency on China?’” Zink, who also
At least US$50 million for the freedom of an Emirati sheikh: That is the king’s ransom paid two weeks ago to militants linked to al-Qaeda who are pushing to topple the Malian government and impose Islamic law. Alongside a crippling fuel blockade, the Group for the Support of Islam and Muslims (JNIM) has made kidnapping wealthy foreigners for a ransom a pillar of its strategy of “economic jihad.” Its goal: Oust the junta, which has struggled to contain Mali’s decade-long insurgency since taking power following back-to-back coups in 2020 and 2021, by scaring away investors and paralyzing the west African country’s economy.
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
AI BOOST: Next year, the cloud and networking product business is expected to remain a key revenue pillar for the company, Hon Hai chairman Young Liu said Manufacturing giant Hon Hai Precision Industry Co (鴻海精密) yesterday posted its best third-quarter profit in the company’s history, backed by strong demand for artificial intelligence (AI) servers. Net profit expanded 17 percent annually to NT$57.67 billion (US$1.86 billion) from NT$44.36 billion, the company said. On a quarterly basis, net profit soared 30 percent from NT$44.36 billion, it said. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said earnings per share expanded to NT$4.15 from NT$3.55 a year earlier and NT$3.19 in the second quarter. Gross margin improved to 6.35 percent,
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