European shares ended a choppy session slightly higher on Friday, but were down on the week as investors worried about the fallout from the Russia-Ukraine war, while a rally in the commodities sector kept a lid on declines.
The pan-European STOXX 600 added 0.1 percent, with losses for banks and some defensive stocks offsetting gains in energy, basic materials and technology names.
“Some late weakness has seen equities fall back, but overall, the rally in equities is still going,” said Chris Beauchamp, chief market analyst at online trading platform IG. “Nervousness remains, but equities have moved through the week without giving back too much ground.”
END OF RUN
After two weeks of gains that saw it rise more than 7 percent, the STOXX 600 lost 0.2 percent this week, as lofty energy and commodity prices from sanctions on Russia fanned inflation fears and stoked worries about an economic growth slowdown.
The US would work to supply liquefied natural gas to the EU this year to help it wean off Russian energy supplies, Western leaders said, as Russia said payment in rubles for natural gas exports was just days away, exacerbating supply shortage worries.
Germany said it has made significant progress toward reducing its exposure to imports of Russian gas, oil and coal.
Europe’s basic materials sector is up 20 percent so far this year and the energy index is 15 percent higher.
The Ukraine war is likely to reduce prospects for global growth in the coming year, US Secretary of the Treasury Janet Yellen said on Friday.
German business morale deteriorated this month due to worsening supply chain issues resulting from high gasoline prices, but the country is not facing a recession in the first quarter due to the Ukraine war, the Ifo institute said on Friday.
SUPPLY SHOCK
“Equities are seen as a relatively good hedge in case of inflation, but the type of inflation that we’re currently seeing is a supply shock, which is unlike the demand destruction caused by COVID-19,” Rabobank NV senior market economist Elwin de Groot said. “In a broad sense, you can question whether companies can sail through this without any damage.”
Telecom Italia SpA rose 1.8 percent as sources said CVC Capital Partners and rival private equity investors are looking at a potential investment in the services arm of the company.
Generali SpA firmed 1.9 percent, lifted by a new plan for the insurer that targets higher growth.
Sweden’s Trelleborg AB jumped 23.2 percent after Yokohama Rubber Co agreed to buy Trelleborg Wheel Systems for ¥265.2 billion (US$2.18 billion).
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
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
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