Losses in technology stocks dragged European shares down on Friday, after red-hot US inflation drove up bond yields, although a positive earnings season and strong commodity prices helped the STOXX 600 log its first weekly gain this year.
The pan-European STOXX 600 index closed 0.59 percent lower at 469.57, but added 1.61 percent for the week, its best weekly showing since late December last year.
Tech stocks fell 2.2 percent, the most among their peers on Friday. The sector, along with utilities, was among the worst performers this week, under pressure from elevated debt yields.
Bond yields spiked after data showed that US inflation jumped this month, while hawkish comments from US Federal Reserve officials also raised expectations for a sharp rate hike next month.
“Strong quarterly earnings in Europe could dampen the sell-off, but until fears about a more aggressive response from the FOMC [US Federal Open Market Committee] dissipate, markets will remain under pressure,” Equiti Capital head macro economist Stuart Cole said.
However, “the Fed will do everything it can to avoid spooking the market ... akin to what we saw last month, and that means treading carefully,” Cole added.
European bond yields retreated after sharp gains on Thursday.
European Central Bank (ECB) President Christine Lagarde said that raising the ECB’s main interest rate now would not bring down record-high eurozone inflation and only hurt the economy.
Meanwhile, the German Association of German Chambers of Industry and Commerce on Friday cut its growth forecast for this year for Europe’s biggest economy to 3 percent from the 3.6 percent it had predicted in October last year, due to rising energy prices, raw material shortages and a lack of skilled workers.
Travel and leisure stocks were the best performers this week, up 7.4 percent on optimism about the easing of mask mandates in some US states.
Heavyweight mining stocks were also among the top performers this week, as expectations of improving demand in China drove up commodity prices.
In the UK, the blue-chip FTSE 100 slipped 0.15 percent to 7,661.02, but gained 1.92 percent from a week earlier.
The FTSE 100 has outperformed the STOXX 600 index this year, thanks to its heavy weighting toward banking and commodity stocks.
Britain’s economy shrank by a less-than-expected 0.2 percent in December, suggesting that — despite setbacks caused by the Omicron variant of SARS-CoV-2 — GDP grew well across the fourth quarter, data showed.
“The last month of the year wasn’t all doom and gloom ... and looking over the last quarter as a whole, there’s plenty to be positive about,” AJ Bell financial analyst Danni Hewson said.
The question now is whether this year would see the UK shake off December’s blip or whether supply constraints and rising prices would keep a lid on household consumption, which has been a key factor in GDP growth, Hewson added.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
RSS