European stocks fell on Friday, as worries about troubled property developer China Evergrande Group (恆大集團) and weak German business confidence data prompted investors to book some profits after a mid-week rally.
European sportswear makers Adidas AG, Puma SE and JD Sports Fashion PLC fell about 3 percent each after US rival Nike Inc cut its fiscal 2022 sales expectations and predicted delays during the holiday shopping season due to a supply chain crunch.
Retail stocks were the top decliners in Europe, down 1.7 percent, while the region-wide STOXX 600 fell 0.9 percent to 463.29, but a three-day rally put the index 0.31 percent higher for the week.
“Equities have rallied to take a pause early this morning faced with the likely default of Evergrande,” Nordea Asset Management senior macro strategist Sebastien Galy said.
Meanwhile, a survey by Ifo Institute showed German business morale this month fell for a third straight month, hit by supply chain woes that are causing a “bottleneck recession” for manufacturers in Europe’s largest economy.
Germany’s DAX fell 0.72 percent to 15,531.75, up 0.27 percent from a week earlier, heading into the weekend when the country votes to elect German Chancellor Angela Merkel’s successor.
“Some of the hesitancy in European markets could also be put down to the German elections, which promise to be the most interesting in some time,” IG chief market analyst Chris Beauchamp said.
“Markets are facing a change of direction in Germany unlike anything seen in the past decade or more, and the end of Merkel’s tenure promises to be a watershed moment for the EU and global investors alike,” Beauchamp added.
The benchmark STOXX 600 is on course to end the month in the red after seven consecutive months of gains, as rising energy prices and supply-chain bottlenecks fed into fears of inflation, while major central banks plan to cut COVID-19 stimulus.
However, European Central Bank President Christine Lagarde said in an interview aired on CNBC that many of the drivers of a recent spike in eurozone inflation are temporary and could fade in the next year.
London’s FTSE 100 ended lower as concerns about a slowdown in global economic growth outweighed gains in healthcare and energy stocks.
It eased 0.38 percent to 7,051.48, but posted a weekly increase of 1.26 percent, snapping a three-week losing streak.
Retailers, industrial miners and life insurers were the top losers.
The FTSE 100 has gained nearly 9.5 percent so far this year on higher energy prices and accommodative central bank policies.
However, it has significantly underperformed a 17 percent rise among its European peers.
When an apartment comes up for rent in Germany’s big cities, hundreds of prospective tenants often queue down the street to view it, but the acute shortage of affordable housing is getting scant attention ahead of today’s snap general election. “Housing is one of the main problems for people, but nobody talks about it, nobody takes it seriously,” said Andreas Ibel, president of Build Europe, an association representing housing developers. Migration and the sluggish economy top the list of voters’ concerns, but analysts say housing policy fails to break through as returns on investment take time to register, making the
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NOT TO WORRY: Some people are concerned funds might continue moving out of the country, but the central bank said financial account outflows are not unusual in Taiwan Taiwan’s outbound investments hit a new high last year due to investments made by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other major manufacturers to boost global expansion, the central bank said on Thursday. The net increase in outbound investments last year reached a record US$21.05 billion, while the net increase in outbound investments by Taiwanese residents reached a record US$31.98 billion, central bank data showed. Chen Fei-wen (陳斐紋), deputy director of the central bank’s Department of Economic Research, said the increase was largely due to TSMC’s efforts to expand production in the US and Japan. Investments by Vanguard International
WARNING SHOT: The US president has threatened to impose 25 percent tariffs on all imported vehicles, and similar or higher duties on pharmaceuticals and semiconductors US President Donald Trump on Wednesday suggested that a trade deal with China was “possible” — a key target in the US leader’s tariffs policy. The US in 2020 had already agreed to “a great trade deal with China” and a new deal was “possible,” Trump said. Trump said he expected Chinese President Xi Jinping (習近平) to visit the US, without giving a timeline for his trip. Trump also said that he was talking to China about TikTok, as the US seeks to broker a sale of the popular app owned by Chinese firm ByteDance Ltd (字節跳動). Trump last week said that he had
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