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.
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
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