European shares inched lower on Friday, even as they ended the year on a higher note, amid surging COVID-19 infections around the world and on worries over the pace of global economic recovery from the COVID-19 pandemic.
Volumes were thin, with many traders away and most major European bourses closed. London and Paris had shortened trading sessions.
The pan-European STOXX 600 fell 0.19 percent to 487.80, with retail stocks leading losses. The benchmark index added 1.1 percent this week.
New Year celebrations around the world have been called off as the surge in COVID-19 cases cast a gloom over festivities for a second year in a row.
Still, the European benchmark ended the year 22 percent higher, its second best year since 2009, with all of the major subsectors making yearly gains.
Banks and tech stocks rallied the most this year, adding 34 percent each, while travel stocks battered by the COVID-19 pandemic underperformed, eking out gains of 4 percent.
“The pandemic-related rescue packages allowed European banks to absorb the shock caused by the contraction in economic activity at the start of the year,” said Charalambos Pissouros, head of research at JFD Group.
“With [European Central Bank] President [Christine] Lagarde saying that they are unlikely to start raising interest rates in 2022, European banks may continue to benefit,” Pissouros said.
Tech stocks would continue to benefit as the work-from-home flexibility stays, while sectors such as construction materials , automobiles, and food and beverage could lose steam next year, as central banks are expected to aggressively tighten monetary policies, Pissouros added.
In London. the FTSE 100 ended the year with its best annual performance in five years on the back of gains in commodity-linked and industrial stocks, although it fell in Friday’s holiday-thinned trading.
The benchmark index declined 0.25 percent to 7,384.54, hit by concerns around surging COVID-19 cases as the UK reported a record rise in daily infections. It rose 0.17 percent from a week earlier.
British blue-chip shares gained 14.3 percent last year, but underperformed their European and US peers, which have scaled multiple record highs.
“There are still concerns that the true impact of Brexit hasn’t been very obvious just because of the COVID-19 pandemic and the logistics crisis caused by the lockdowns,” Equiti Capital market analyst David Madden said. “International fund managers are overall still taking money out of the UK and putting it elsewhere.”
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