European shares slid on Friday, ending the week sharply lower after major central banks flagged further rate hikes, while economic activity data from the eurozone failed to assuage concerns of a looming recession.
The Europe-wide STOXX 600 index closed 1.2 percent lower at 424.74 on Friday, ending the week with a loss of 3.28 percent.
The index posted its steepest one-day drop since May in the previous session after the European Central Bank (ECB) joined the US Federal Reserve in saying that monetary policy would continue to tighten even at a risk to the economy.
ECB President Christine Lagarde on Thursday said that there would likely be more 50 basis-point rate hikes for a period of time, and that the central bank was not “pivoting” yet.
The hawkish messages dealt a blow to markets, which had rallied in the past few weeks on hopes that signs of cooling inflation would pave the way for major central banks to soon end their aggressive rate-hike trajectory.
“Beyond the inflationary pressures, there is a growth issue at stake,” said Giuseppe Sette, president of AI investment platform Toggle.
“There is a very clear emerging consensus that the risk of recession is a concrete risk for next year. If we have a severe recession next year, earnings are going to fall and valuations are going to be unsustainable,” Sette said.
Investment bank JPMorgan Chase & Co on Thursday ramped up its forecast for how high eurozone interest rates would go to 3.25 percent from 2.5 percent.
Italian ministers lashed out at the ECB, saying its decision to hike borrowing costs raised the financial pressure on one of the eurozone’s most indebted countries.
Italy’s FTSE MIB Index slipped 0.16 percent to 23,688.16 on Friday, down 2.43 percent from a week earlier and extending its losses for a third straight week.
Adding to slowdown concerns, data on Friday showed that eurozone business activity this month shrank at the slowest pace in four months, but remained in contraction for a sixth straight month.
The UK’s blue-chip FTSE 100 fell 1.27 percent to a one-month closing low of 7,332.12 after British retail sales fell unexpectedly last month as high borrowing costs eat into household finances. It posted a weekly decline of 1.93 percent.
Eurozone borrowing costs on Friday rose as investors raised their forecasts on bond yields after the ECB’s commentary.
Healthcare stocks weighed on the STOXX 600, with pharmaceutical companies such as Bayer AG and AstraZeneca falling 3.8 percent and 1.8 percent respectively.
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
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day