European shares rose on Friday as industrial and financial stocks gained on China-led optimism, but recession worries ahead of a slew of central bank decisions dragged the STOXX 600 index to a weekly loss after a seven-week rally.
The STOXX 600 closed 0.8 percent higher, at 439.13, snapping a five-day losing streak that was largely driven by concerns about an impending global recession due to sharp interest rate increases by global central banks. The index was down 0.94 percent from a week earlier.
The FTSE 100 on Friday gained 0.06 percent to 7,476.63, but lost 1.05 percent from a week earlier.
Data on Thursday showing a rise in US weekly jobless claims raised hopes that the US Federal Reserve could temper its aggressive stance on interest rate hikes, with China’s easing of its strict COVID-19 prevention measures also aiding sentiment.
The next week would be crucial, with rate decisions due from the Fed, the Bank of England and the European Central Bank (ECB).
The ECB might raise rates by 50 basis points next week, a Reuters poll showed, following two straight 75 basis point increases.
Photo: REUTERS
“It’s uncertainty as to what central banks are likely to do in the new year, not next week, that’s prompting a little bit of caution given that most of the economic data that we’re seeing indicate that we are going to see a bit of a slowdown in economic activity,” CMC Markets chief market analyst Michael Hewson said.
Industrial stocks such as Siemens AG and Schneider Electric SE were among the biggest boosts to the index, while China-exposed stocks such as Prudential PLC rose 3.0 percent.
Lenders snapped their four-day losing streak and advanced 0.9 percent, as eurozone banks are set to repay another 447.5 billion euros (US$471.7 billion) in multiyear loans from the ECB, bringing the total paydown to nearly 800 billion euros in just a few weeks, the ECB said.
Credit Suisse jumped 6.8 percent after the embattled bank on Thursday hailed a “milestone” in its turnaround plan after raising 2.24 billion Swiss francs (US$2.39 billion) as part of a SF4 billion cash call.
Vestas A/S gained 6.4 percent as the Danish wind turbine maker announced new orders and UBS raised its price target.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai
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