European stocks climbed this week as Moody’s Investors Service reiterated its investment-grade debt rating on Spain following a review and US reports on retail sales, manufacturing and house building beat estimates.
ArcelorMittal advanced 9.8 percent after a report said the steelmaker is considering the sale of a minority stake in its Canadian iron ore unit. Remy Cointreau SA slumped 9.3 percent after France’s second-biggest distiller posted an improvement in first-half sales that trailed analysts’ projections.
The STOXX Europe 600 Index climbed 1.7 percent to 274.08 this past week, after dropping 1.7 percent the previous week. The equity benchmark has rallied 17 percent from this year’s low on June 4 as European Central Bank (ECB) policymakers approved an unlimited bond buying program and the US Federal Reserve announced a third round of quantitative easing.
“The rating assessment of Spain at the beginning of the week certainly gave the market a positive shove,” said Christian Zogg, who manages about US$540 million as head of equity and fixed income at LLB Asset Management AG in Vaduz, Liechtenstein. “The US data turned out to be good news as well. The market may hold rather well until the end of the year; one just needs to endure the volatility.”
National benchmark indexes gained in every Western European market except Norway and Iceland this past week. Germany’s DAX advanced 2 percent, while the UK’s FTSE 100 added 1.8 percent. France’s CAC 40 and Spain’s IBEX 35 each rallied 3.4 percent.
Moody’s decided against removing Spain’s investment-grade credit rating on Tuesday. The ratings company said that the risk of the country losing access to credit markets has fallen because the ECB now has the power to buy its debt. Moody’s assigned a negative outlook on Spain’s bonds as it concluded a review that it began in June.
Cyprus, Portugal, Ireland and Greece all have ratings below investment grade. S&P has a negative outlook on its “BBB-” rating for Spain, while Fitch Ratings has given the country a “BBB” score, two levels higher than junk.
EU leaders agreed on a timetable to introduce common regulation of the eurozone’s 6,000 lenders by Jan. 1, 2014. At a two-day summit, the 27 member states decided to put in place the framework for the ECB to move to oversee all the banks in the currency area next year.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
CHANGING JAPAN: Nvidia-powered AI services over cellular networks ‘will result in an artificial intelligence grid that runs across Japan,’ Nvidia’s Jensen Huang said Softbank Group Corp would be the first to build a supercomputer with chips using Nvidia Corp’s new Blackwell design, a demonstration of the Japanese company’s ambitions to catch up on artificial intelligence (AI). The group’s telecom unit, Softbank Corp, plans to build Japan’s most powerful AI supercomputer to support local services, it said. That computer would be based on Nvidia’s DGX B200 product, which combines computer processors with so-called AI accelerator chips. A follow-up effort will feature Grace Blackwell, a more advanced version, the company said. The announcement indicates that Softbank Group, which until early 2019 owned 4.9 percent of Nvidia, has secured a
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