European stocks posted their biggest weekly rally since April as the US Federal Reserve’s decision to reduce its monthly bond purchases increased investors’ confidence in the strength of the recovery of the world’s No. 1 economy.
Cable & Wireless Communications PLC surged 16 percent after UK newspapers named it as a potential acquisition target, while Carnival PLC jumped 10 percent after the world’s largest cruise ship operator posted quarterly sales that beat estimates. On the other end, CGG SA slumped 15 percent after the world’s biggest seismic surveyor of oilfields cut its earnings forecast for this year.
The STOXX Europe 600 Index rose 3.7 percent to 321.14 this past week, trimming its decline from the beginning of the month to 1.2 percent.
The equity benchmark has gained 15 percent this year and is on course for its best annual performance since 2009, as central bankers around the world pledged to leave interest rates near record lows for a prolonged period.
“People who were uncertain about European equities hesitated because of tapering and there has just been relief since the announcement,” said Steven Bell, a London-based fund manager at F&C Asset Management PLC. “This year has been about fears not being realized. The tapering talks earlier in the year caused a major wobble, but now people have gotten used to it. It’s another year the European economy hasn’t fallen apart.”
National benchmark indices rose in every western European market except Greece and Iceland this week. The UK’s FTSE 100 Index advanced 2.6 percent, France’s CAC 40 gained 3.3 percent and Germany’s DAX jumped 4.4 percent.
“When financial markets see a relatively healthy economy, they would like to have some of the emergency life support removed,” Toby Nangle, head of multi-asset allocation at Threadneedle Asset Management Ltd in London, said by telephone.
Also this week, an EU report showed that eurozone factory output grew at a faster pace this month than economists had forecast.
Markit Economics’ Purchasing Managers’ Index also beat estimates by climbing to 52.7, as did a measure of manufacturing in Germany, the continent’s largest economy, which rose to 54.2 this month. Readings above 50 mean that activity increased.
The biggest news of the week was the EU’s finance ministers reaching an agreement late on Wednesday on how to deal with cross-border banks that fail. The meeting pledged to set up a 55 billion euro (US$75 billion) industry-financed fund for the next decade.
The ministers also agreed to establish an agency to make decisions on handling failing banks and when to share costs.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) would not produce its most advanced technologies in the US next year, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the comment during an appearance at the legislature, hours after the chipmaker announced that it would invest an additional US$100 billion to expand its manufacturing operations in the US. Asked by Taiwan People’s Party Legislator-at-large Chang Chi-kai (張啟楷) if TSMC would allow its most advanced technologies, the yet-to-be-released 2-nanometer and 1.6-nanometer processes, to go to the US in the near term, Kuo denied it. TSMC recently opened its first US factory, which produces 4-nanometer
GREAT SUCCESS: Republican Senator Todd Young expressed surprise at Trump’s comments and said he expects the administration to keep the program running US lawmakers who helped secure billions of dollars in subsidies for domestic semiconductor manufacturing rejected US President Donald Trump’s call to revoke the 2022 CHIPS and Science Act, signaling that any repeal effort in the US Congress would fall short. US Senate Minority Leader Chuck Schumer, who negotiated the law, on Wednesday said that Trump’s demand would fail, while a top Republican proponent, US Senator Todd Young, expressed surprise at the president’s comments and said he expects the administration to keep the program running. The CHIPS Act is “essential for America leading the world in tech, leading the world in AI [artificial
REACTIONS: While most analysts were positive about TSMC’s investment, one said the US expansion could disrupt the company’s supply-demand balance Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) new US$100 billion investment in the US would exert a positive effect on the chipmaker’s revenue in the medium term on the back of booming artificial intelligence (AI) chip demand from US chip designers, an International Data Corp (IDC) analyst said yesterday. “This is good for TSMC in terms of business expansion, as its major clients for advanced chips are US chip designers,” IDC senior semiconductor research manager Galen Zeng (曾冠瑋) said by telephone yesterday. “Besides, those US companies all consider supply chain resilience a business imperative,” Zeng said. That meant local supply would
Servers that might contain artificial intelligence (AI)-powering Nvidia Corp chips shipped from the US to Singapore ended up in Malaysia, but their actual final destination remains a mystery, Singaporean Minister for Home Affairs and Law K Shanmugam said yesterday. The US is cracking down on exports of advanced semiconductors to China, seeking to retain a competitive edge over the technology. However, Bloomberg News reported in late January that US officials were probing whether Chinese AI firm DeepSeek (深度求索) bought advanced Nvidia semiconductors through third parties in Singapore, skirting Washington’s restrictions. Shanmugam said the route of the chips emerged in the course of an
RSS