European shares on Friday closed at near one-month lows, as a cocktail of negative factors from China’s COVID-19 lockdowns to worries about rapid interest rate hikes subdued sentiment globally.
The pan-European STOXX 600 shed 1.79 percent to 453.31 — its weakest finish since March 25 — and lost 1.42 percent from a week earlier.
The basic resources sector, which houses global miners such as Glencore PLC and Rio Tinto, tumbled 3.6 percent as metal prices took a hit from lockdowns in top metals consumer China.
Meanwhile, weak earnings from British discount retailer B&M and a worse-than-expected retail sales reading for lat month drove retailers down 3.7 percent.
London’s blue-chip FTSE 100 index closed 1.39 percent lower at 7,521.68, declining 1.24 percent from a week earlier.
Broadly, world stocks hit five-week lows as investors feared that rapid interest rate hikes in the UK, the US and the eurozone in the face of surging inflation would weigh on economic growth.
US Federal Reserve Chairman Jerome Powell on Thursday said that a 50-basis-point rate increase “will be on the table” when the bank meets on May 3 and 4, while the European Central Bank (ECB) is likely raise rates before the end of the year, ECB President Christine Lagarde told CNBC on Friday.
“The market had seemed to adjust to a faster pace of hikes, but the view is now that, if Powell is happy with 50 basis points, then it gives cover for others to call for even faster tightening,” IG Groups chief market analyst Chris Beauchamp said.
“This has cut the foundations from underneath the rally in stocks over recent days, and suggests that the second half of April will be just as tough as the first for most equities,” Beauchamp said.
Traders ramped up bets that the ECB would hike its policy rate — currently at minus-0.5 percent — by about 85 basis points by the end of the year, up from about 70 basis points on Thursday.
Focus was also on France’s presidential run-off vote today. France’s CAC 40 closed 1.99 percent lower at 6,581.42, along with the broad sell-off, and dipped 0.12 percent from a week earlier.
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