A surge for London-listed companies brought European stock markets within striking distance of an all-time high on Friday as investors cheered the likelihood of an orderly Brexit after a landslide election victory for British Prime Minister Boris Johnson.
The UK-focused FTSE mid-cap index jumped 5 percent to a record high, pushing the broader pan-European STOXX 600 up 1.1 percent to 412 points, up 1.1 percent for the week.
The blue-chip FTSE 100 also advanced on Friday as solid gains in banks and utilities helped the export-heavy index shrug off the impact of a surge in sterling, which typically weakens sentiment toward component companies.
Dublin’s ISEQ, also considered a barometer of Brexit sentiment, jumped to a 12-year high.
Markets believe a Conservative Party win would enable Johnson to deliver Brexit within weeks, easing fears that the UK could crash out and ending three-and-a-half years of uncertainty over the shape of the country’s exit from the trading bloc.
“The big issue has been the lack of direction and that goes away, which is why sterling is rallying and Gilt yields are back up and domestically focused equities are gaining,” said Gaurav Saroliya, director of global macro strategy at Oxford Economics.
The benchmark European index is just two points shy of a record high hit in 2015.
It is also on track to end the year almost 20 percent higher, its biggest annual gain in a decade, as investors turn optimistic about another major economic issue — the prolonged US-China trade dispute.
Trade-sensitive German shares jumped 1.3 percent on Friday after the US agreed to suspend a new round of Chinese tariffs in return for Beijing buying more US farm goods.
All major country indices were trading higher.
The European travel and leisure index rose, boosted by a 7.5 to 9 percent surge for Brexit-sensitive airline stocks such as EasyJet PLC, International Consolidated Airlines Group and Ryanair Holdings PLC.
Delivery Hero SE gained more than 23 percent as it agreed to buy South Korea’s top food delivery app operator Woowa Brothers for US$4 billion and form a joint venture.
German consumer goods company Henkel AG & Co slipped 3.67 percent as the consumer goods company said it expects its earnings before interest and taxes margin to fall to 15 percent next year.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
VERTICAL INTEGRATION: The US fabless company’s acquisition of the data center manufacturer would not affect market competition, the Fair Trade Commission said The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition. As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday. ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
RSS