European stocks fell on Friday, as worries about troubled property developer China Evergrande Group (恆大集團) and weak German business confidence data prompted investors to book some profits after a mid-week rally.
European sportswear makers Adidas AG, Puma SE and JD Sports Fashion PLC fell about 3 percent each after US rival Nike Inc cut its fiscal 2022 sales expectations and predicted delays during the holiday shopping season due to a supply chain crunch.
Retail stocks were the top decliners in Europe, down 1.7 percent, while the region-wide STOXX 600 fell 0.9 percent to 463.29, but a three-day rally put the index 0.31 percent higher for the week.
“Equities have rallied to take a pause early this morning faced with the likely default of Evergrande,” Nordea Asset Management senior macro strategist Sebastien Galy said.
Meanwhile, a survey by Ifo Institute showed German business morale this month fell for a third straight month, hit by supply chain woes that are causing a “bottleneck recession” for manufacturers in Europe’s largest economy.
Germany’s DAX fell 0.72 percent to 15,531.75, up 0.27 percent from a week earlier, heading into the weekend when the country votes to elect German Chancellor Angela Merkel’s successor.
“Some of the hesitancy in European markets could also be put down to the German elections, which promise to be the most interesting in some time,” IG chief market analyst Chris Beauchamp said.
“Markets are facing a change of direction in Germany unlike anything seen in the past decade or more, and the end of Merkel’s tenure promises to be a watershed moment for the EU and global investors alike,” Beauchamp added.
The benchmark STOXX 600 is on course to end the month in the red after seven consecutive months of gains, as rising energy prices and supply-chain bottlenecks fed into fears of inflation, while major central banks plan to cut COVID-19 stimulus.
However, European Central Bank President Christine Lagarde said in an interview aired on CNBC that many of the drivers of a recent spike in eurozone inflation are temporary and could fade in the next year.
London’s FTSE 100 ended lower as concerns about a slowdown in global economic growth outweighed gains in healthcare and energy stocks.
It eased 0.38 percent to 7,051.48, but posted a weekly increase of 1.26 percent, snapping a three-week losing streak.
Retailers, industrial miners and life insurers were the top losers.
The FTSE 100 has gained nearly 9.5 percent so far this year on higher energy prices and accommodative central bank policies.
However, it has significantly underperformed a 17 percent rise among its European peers.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts