European stocks rose to fresh six-week highs on Friday, helped by an easing of fears over US tariffs and some solid company results.
Shares in consumer goods company Reckitt Benckiser Group PLC, supermarket retailer Carrefour SA, construction group Vinci SA, BT Group and bank BBVA SA rose following well-received results, lifting the pan-European STOXX 600 benchmark, closing 0.6 percent higher.
“On average, earnings updates are quite good,” Geneva, Switzerland-based Prime Partners Group fund manager Jerome Schupp said. “The message about the second half is also reassuring given the uncertainties regarding trade wars.”
European second-quarter earnings per share growth has accelerated to six percent from 0 percent in the first, a result they said was good given the deterioration in euro area growth momentum, Deutsche Bank AG said.
Hopes of a breakthrough in US-EU trade talks on Thursday lifted the STOXX 600 to its highest level since the middle of last month as automakers, which rely on exports for growth, rose sharply.
The index ended the week up 1.7 percent.
However, investors kept a degree of caution.
The US Department of Commerce is to continue its probe into whether car imports pose a national security risk despite ongoing trade talks with the EU, but US President Donald Trump asked that no action be taken at this time, US Secretary of Commerce Wilbur Ross said on Thursday.
Automakers declined 0.2 percent on the STOXX 600 on Friday.
Renault SA rose nearly 2 percent after a volatile start as the French automaker achieved record profitability in the first half of this year as emerging market sales surged.
“Results came in line with a modest headline beat and better net liquidity, but details of margin development, and capital intensity are mixed and likely to keep pressure on margins,” Jefferies LLC analysts said in a note.
Shares in German automakers BMW AG and Daimler AG, which are heavily exposed to the US market, slipped slightly.
Mining company BHP Billiton Ltd rose 3 percent after BP PLC agreed to buy its US shale oil and gas assets for US$10.5 billion. BP shares reversed earlier losses to end 0.5 percent higher.
“The shale deal presents a promising opportunity for BP to reverse many years of underinvestment,” Accendo Markets Artjom analyst Artjom Hatsaturjants said.
“Still, it comes at a price of a short-term hit to shareholder value and would divide those investors looking for a quick profit from rising oil prices and those who see a long-term opportunity in holding energy stocks,” he added.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to