European stocks fell on Friday on nervousness around the Omicron variant of SARS-CoV-2, while the US inflation reading coming in broadly in line with expectations did little to allay uncertainty around US monetary policy.
The pan-European STOXX 600 slipped 0.3 percent, down for third straight session on worries that measures to curb the spread of the Omicron variant could hit economic recovery.
However, a strong two-day gain at the beginning of the week saw the index post the best weekly gain since March, up 2.8 percent.
Data on Friday showed that US annual consumer prices rose further to 6.8 percent — the biggest year-on-year rise since June 1982 and followed a 6.2 percent advance in October.
“It looks to be a subdued end to the week ... as stocks pause for breath following the big gains in the first half of the week,” said Chris Beauchamp, chief market analyst at IG.
“US CPI [consumer price index] came in line with expectations, but prices continue to rise, meaning that while the pressure on the Fed to raise rates hasn’t increased much as a result of today’s data, it doesn’t really lessen it either,” he said.
On the contrary, news that the European Central Bank is widely considering a temporary increase to its bond purchase plan at a policy meeting next week was seen as a dovish step.
Technology and retail were the top decliners in Europe on Friday.
“We think the path for equities is lower over the next 12 months,” said Milla Savova, European equity strategist at Bank of America. “Real bond yields will come up from record lows as the Fed turns more hawkish and the market starts to price in a sharper-than-expected Fed hiking cycle.”
Auto stocks were led higher by Daimler AG, which rose 2.9 percent after spun-off Daimler Truck climbed in its market debut on the Frankfurt Stock Exchange.
Gains for the sector came even as data showed that China’s auto sales dropped 9.1 percent last month, marking their seventh consecutive monthly fall, as a prolonged global shortage of semiconductors disrupted production.
Tobacco group Swedish Match AB jumped 7.2 percent after the Wall Street Journal reported that US Democrats dropped a proposed vaping tax that would have taxed e-cigarettes like regular ones.
Food delivery companies Deliveroo Holdings PLC and Just Eat Takeaway.com NV slipped 2.4 percent and 3.2 percent respectively, adding to losses in the past week on worries that a European Commission ruling on gig economy drivers would hurt profits.
Polish fashion retailer LPP Spolka Akcyjna jumped 10.2 percent to hit a fresh record high, extending Thursday’s rally after strong third-quarter results.
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