European shares rose on Friday and logged their first monthly gain in four months as a host of solid earnings from corporate Europe overshadowed fears of a global recession, with some positive economic data also lending support.
The pan-European STOXX 600 was up 1.28 percent to a near two-month high of 438.29, and logged its best monthly performance since November 2020. It posted a weekly gain of 2.96 percent.
Boosting sentiment, the eurozone economy grew much faster than expected in the second quarter, with gross domestic product rising 0.7 percent quarter-on-quarter in the April-to-June period for a 4 percent year-on-year gain, strongly beating expectations of a 0.2 percent quarterly and 3.4 percent annual gain.
However, inflation this month rose to another record high, with consumer price growth accelerating to 8.9 percent in the month from 8.6 percent a month earlier, far above expectations for 8.6 percent and well clear of the European Central Bank’s 2 percent target.
“The picture still looks patchy, with uneven dynamics in terms of consumption and investment — we still expect a material deterioration in the outlook in Q3 and a mildly negative print in Q4,” Morgan Stanley economists and strategists wrote in a note.
“Underlying inflationary pressure remains strong and we expect further increases in the coming months... We see mounting headwinds from slowing growth and falling input cost pressures,” they wrote.
Meanwhile, data on Thursday showed that the US economy shrank for a second straight quarter.
Worries about a recession have led to scaled down bets of central bank policy tightening, with money markets now pricing in a roughly 44 percent chance of a 50 basis-point hike by the European Central Bank in September, compared with a 50 percent chance earlier this week.
Oil stocks led gains after crude prices jumped more than US$4 a barrel as attention turned to next week’s OPEC+ meeting.
The UK’s blue-chip FTSE 100 rose on Friday, marking its best monthly performance since December last year, as a jump in commodities and a slew of upbeat earnings reports from companies like NatWest outweighed economic slowdown worries.
The index gained 1.06 percent to 7,423.43, rising 2.02 percent from a week earlier.
NatWest rose 8.1 percent after the bank raised its full-year forecast and made a bumper payout to shareholders, lifting the banking index 1.5 percent higher.
“The sector’s earnings so far have benefited from the rising rate environment and volatile financial markets that have boosted trading activity,” said Victoria Scholar, head of investment at Interactive Investor.
However, she added that there were concerns for financial stocks due to the shaky British macroeconomic outlook for the second half.
AI TREND: TSMC has been rapidly expanding capacity to meet a spike in demand for advanced packaging services, but still expects supplies to be tight for 18 months Arizona is in talks with Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) about advanced chip packaging, state Governor Katie Hobbs said yesterday, which is crucial for the manufacturing of artificial intelligence (AI) chips. TSMC, which is building a US$40 billion chip factory in the US state, has not announced plans to build facilities for advanced chip packaging in the US. Advanced packaging processes stitch multiple chips together into a single device, lowering the added cost of more powerful computing. “Part of our efforts at building the semiconductor ecosystem is focusing on advanced packaging, so we have several things in the works around that
NXP Semiconductors NV expects its first automotive-grade 5-nanometer chip built by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to become available for automakers within one-and-a-half years at the earliest, following demand for better computing performance and energy efficiency for connected vehicles, a company executive said yesterday. That would mean a significant upgrade from the 16-nanometer technology NXP adopted in its existing series of microprocessors. NXP chief technology executive Lars Reger made the remarks during a media briefing yesterday in Taipei. The latest updates came after NXP unveiled its plan to source 5-nanometer capacity from TSMC in 2021. This is Reger’s first trip to
Tailwinds: Blockbuster earnings at Nvidia Corp have sparked hopes of a tech sector boom; Taiwanese chipmakers are hopeful benefits will come to them too The worst could be over for the New Taiwan dollar as China’s economic recovery and a rebound in the chip industry will support the beleaguered currency, analysts said. The NT dollar is on course to weaken for a sixth month, the longest stretch since 2006, after foreign funds turned sour on its technology sector and risk sentiment deteriorated on slower growth in China. The tide seems to be turning now on nascent signs of stabilization in China’s economy — its biggest trading partner — following policy boosts. The yuan emerged as the best-performing Asian currency last week, followed by the Japanese yen
The European Commission’s digital chief yesterday said that murky Chinese laws were fueling concerns among foreign firms in the country, following discussions with Beijing officials about critical areas such as artificial intelligence (AI) and data governance. Vera Jourova, who is also the commission’s vice president, made the comments after meeting on Monday with Chinese counterparts including Vice Premier Zhang Guoqing (張國清) in the second “High-level Digital Dialogue” between the two sides. Among the concerns Jourova said she had heard about from European businesses in China was the “unpredictability of the decisions and interpretation of the laws by the regulators.” Beijing has recently implemented
RSS