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.
SEMICONDUCTOR SERVICES: A company executive said that Taiwanese firms must think about how to participate in global supply chains and lift their competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it expects to launch its first multifunctional service center in Pingtung County in the middle of 2027, in a bid to foster a resilient high-tech facility construction ecosystem. TSMC broached the idea of creating a center two or three years ago when it started building new manufacturing capacity in the US and Japan, the company said. The center, dubbed an “ecosystem park,” would assist local manufacturing facility construction partners to upgrade their capabilities and secure more deals from other global chipmakers such as Intel Corp, Micron Technology Inc and Infineon Technologies AG, TSMC said. It
People walk past advertising for a Syensqo chip at the Semicon Taiwan exhibition in Taipei yesterday.
NO BREAKTHROUGH? More substantial ‘deliverables,’ such as tariff reductions, would likely be saved for a meeting between Trump and Xi later this year, a trade expert said China launched two probes targeting the US semiconductor sector on Saturday ahead of talks between the two nations in Spain this week on trade, national security and the ownership of social media platform TikTok. China’s Ministry of Commerce announced an anti-dumping investigation into certain analog integrated circuits (ICs) imported from the US. The investigation is to target some commodity interface ICs and gate driver ICs, which are commonly made by US companies such as Texas Instruments Inc and ON Semiconductor Corp. The ministry also announced an anti-discrimination probe into US measures against China’s chip sector. US measures such as export curbs and tariffs
The US on Friday penalized two Chinese firms that acquired US chipmaking equipment for China’s top chipmaker, Semiconductor Manufacturing International Corp (SMIC, 中芯國際), including them among 32 entities that were added to the US Department of Commerce’s restricted trade list, a US government posting showed. Twenty-three of the 32 are in China. GMC Semiconductor Technology (Wuxi) Co (吉姆西半導體科技) and Jicun Semiconductor Technology (Shanghai) Co (吉存半導體科技) were placed on the list, formally known as the Entity List, for acquiring equipment for SMIC Northern Integrated Circuit Manufacturing (Beijing) Corp (中芯北方積體電路) and Semiconductor Manufacturing International (Beijing) Corp (中芯北京), the US Federal Register posting said. The
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