European stocks rallied for a third week, climbing to an 18-month high, amid increasing optimism that China’s economy will sustain its recovery and US lawmakers will reach a compromise to avoid a fiscal deadlock.
Rio Tinto Group led commodity shares higher, as Nokia Oyj gained 14 percent after winning a deal to sell its flagship smartphone in China. European Aeronautic, Defence & Space Co jumped 15 percent after announcing a new shareholder structure and unveiling a share buyback, while GDF Suez SA slid to a record low after saying earnings will decline next year.
The benchmark STOXX Europe 600 Index advanced 1.2 percent to 279.17 this week, the highest since May last year. The gauge has rallied 19 percent from this year’s low on June 4 as the European Central Bank and the US Federal Reserve expanded bond purchases, and US economic data beat estimates.
Republican defectors joined Democrats in signing a letter calling on US President Barack Obama and US House of Representatives Speaker John Boehner to explore “all options” to end an impasse over taxes on top earners. The US Congress must strike a budget deal before the New Year to prevent US$607 billion of automatic tax increases and spending cuts from coming into effect.
Obama said he is willing to make concessions in the talks if Republicans agree to consider taxes on the rich.
In China, the government under Chinese Vice President Xi Jinping (習近平) will keep macroeconomic policies stable, making adjustments as needed to deal with difficulties, a statement from the Chinese Communist Party’s politburo said.
The world’s second-largest economy will expand domestic demand, actively promote urbanization, strengthen real-estate controls and support small businesses, Xinhua news agency reported on Tuesday, citing the statement issued after a meeting of the ruling party’s top leaders.
In the eurozone, German Chancellor Angela Merkel hinted at the possibility that her country will eventually accept a writeoff of Greek debt. Greece made a 10 billion euro (US$13 billion) offer to buy back bonds.
A gauge of mining companies posted the biggest gain on the STOXX 600. Rio Tinto climbed 5.3 percent after Credit Suisse Group AG added the world’s second-largest mining company to its “Europe Focus” list. Kazakhmys PLCA rose 4.5 percent after saying it will start the development of the Aktogay copper project in Kazakhstan early next year.
Nokia rallied 14 percent after winning a deal with China Mobile Ltd (中國移動) to carry the Finnish mobile phone maker’s flagship smartphone, the Lumia 920T.
EADS jumped 15 percent after the company changed its ownership structure to allow Germany and France to each hold a 12 percent stake. EADS also said it will buy back as much as 15 percent of outstanding shares.
Stagecoach Group PLC, which owns 49 percent of Virgin Trains, advanced 5.9 percent. The company reported first-half pretax profits of ￡124 million (US$200 million), exceeding the average analyst estimate of ￡114 million.
Wincor Nixdorf AG, Europe’s biggest maker of automated teller machines, increased 6.8 percent. The company said it expects earnings before interest, taxes and amortization in 2014 to be higher than last year.
GDF Suez declined 12 percent — to the lowest price since it sold shares to the public in July 2005 — after Europe’s largest utility by market value forecast lower earnings next year and weakness in 2014. A gauge of utilities was one of the only two industry groups in the STOXX 600 to decline this week.
Tullow Oil PLCA slumped 9.6 percent after failing to make a commercial find at the Zaedyus-2 well off French Guiana in South America.
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
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
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