European stocks on Friday posted their first monthly decline since a market sell-off in March as growing doubts over a global recovery from the COVID-19 crisis overshadowed a batch of strong earnings from technology firms.
The pan-European STOXX 600 gave up early gains to close 0.89 percent lower at 356.33, pressured by a weak open for Wall Street as optimism from stellar earnings reports from big tech names Amazon.com Inc, Apple Inc and Facebook Inc faded.
The index lost 2.98 percent over the week.
An early reading of the euro zone’s economy showed the bloc shrank by a bigger-than-expected 12.1 percent in the second quarter, its deepest contraction on record as lockdowns ravaged business activity.
Spain’s benchmark index dropped 1.7 percent as the country posted the worst output slump, while GDP in Italy and France also fell sharply, but less than forecast.
“Lockdown exits coupled with massive stimulus brought a strong rebound in activity during Q2, which supported the rally in equities, but recovery appears to be leveling off,” equity strategists at Barclays PLC wrote in a note.
“Overall, choppy markets could continue due to elevated uncertainty, low conviction and tight summer liquidity.”
The STOXX 600 was down about 1 percent last month, with fears of a resurgence in COVID-19 cases also weighing on the mood as Britain imposed a tougher lockdown in swathes of northern England, while Spain saw a surge in new infections.
Technology stocks were among the few gainers, up 0.7 percent after forecast-beating results from Wall Street’s tech majors on Thursday.
The top gainer on the STOXX 600 was Finnish telecom network equipment maker Nokia, up 12.5 percent after reporting an unexpected rise in underlying profit as it reduced low-margin business.
“The strength of numbers from the ‘four horsemen of tech’ is leading to a halo effect for the tech sector and a resumption of growth stocks leading the market,” said Neil Campling, head of technology, media and telecommunications research at Mirabaud Securities. “Nokia results also help sentiment as the key for the equipment stocks is always on margins to get a sense of pricing.”
BNP Paribas SA rose 0.8 percent as it earned a higher-than-expected quarterly profit, boosted by a surge in fixed income trading and strong demand for corporate finance.
Nearly 50 percent of the companies listed on the STOXX 600 have reported quarterly earnings so far, and 64 percent of those have surpassed beaten-down profit expectations, Refinitiv data showed.
Meanwhile in London, the FTSE 100 erased session gains to end at a 10-week low.
The FTSE 100 ended down 1.54 percent after having gained as much as 1.7 percent during the day when upbeat earnings from British American Tobacco and Glencore had lifted the index.
However, both stocks later gave up gains, down 5 percent and 1.4 percent respectively, as sentiment turned, after fears that a nascent economic recovery might reverse were triggered by the stricter lockown measures.
The index dropped 3.69 percent from a week earlier.
Jensen Huang (黃仁勳), founder and CEO of US-based artificial intelligence chip designer Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) on Friday celebrated the first Nvidia Blackwell wafer produced on US soil. Huang visited TSMC’s advanced wafer fab in the US state of Arizona and joined the Taiwanese chipmaker’s executives to witness the efforts to “build the infrastructure that powers the world’s AI factories, right here in America,” Nvidia said in a statement. At the event, Huang joined Y.L. Wang (王英郎), vice president of operations at TSMC, in signing their names on the Blackwell wafer to
AI BOOST: Although Taiwan’s reliance on Chinese rare earth elements is limited, it could face indirect impacts from supply issues and price volatility, an economist said DBS Bank Ltd (星展銀行) has sharply raised its forecast for Taiwan’s economic growth this year to 5.6 percent, citing stronger-than-expected exports and investment linked to artificial intelligence (AI), as it said that the current momentum could peak soon. The acceleration of the global AI race has fueled a surge in Taiwan’s AI-related capital spending and exports of information and communications technology (ICT) products, which have been key drivers of growth this year. “We have revised our GDP forecast for Taiwan upward to 5.6 percent from 4 percent, an upgrade that mainly reflects stronger-than-expected AI-related exports and investment in the third
RARE EARTHS: The call between the US Treasury Secretary and his Chinese counterpart came as Washington sought to rally G7 partners in response to China’s export controls China and the US on Saturday agreed to conduct another round of trade negotiations in the coming week, as the world’s two biggest economies seek to avoid another damaging tit-for-tat tariff battle. Beijing last week announced sweeping controls on the critical rare earths industry, prompting US President Donald Trump to threaten 100 percent tariffs on imports from China in retaliation. Trump had also threatened to cancel his expected meeting with Chinese President Xi Jinping (習近平) in South Korea later this month on the sidelines of the APEC summit. In the latest indication of efforts to resolve their dispute, Chinese state media reported that
CHINESE EXPORT CURBS: A dispute between China and the Netherlands could halt chip supply, affecting vehicle production, US and European auto associations said Groups representing major automakers late on Thursday warned that a chip disruption stemming from a dispute between China and the Dutch government could quickly affect US auto production. Automakers and their suppliers received notice from chipmaker Nexperia (安世半導體) last week that it could no longer guarantee delivery of its chips, the European Automobile Manufacturers Association said, adding that manufacturing could be significantly disrupted. In the US, the Alliance for Automotive Innovation, which represents General Motors, Toyota, Ford, Volkswagen, Hyundai and nearly all other major automakers, urged a quick resolution. “If the shipment of automotive chips doesn’t resume — quickly — it’s going to
RSS