European stocks snapped a two-week advance as concern mounted that an economic slowdown and record oil prices will curb earnings growth.
Deutsche Boerse AG, the region’s biggest exchange by market value, and HBOS Plc, the UK’s largest mortgage lender, led financial shares lower. DSG International Plc, the biggest UK. consumer electronics retailer, paced a decline in consumer stocks after cutting its earnings forecast for the second time this year.
The Dow Jones STOXX 600 Index dropped 2.6 percent to 310.74. The benchmark has fallen 22 percent from last year’s high on June 1 on speculation US$245 billion in losses and writedowns related to the collapse of US subprime mortgages will hurt profits at financial firms and drag down global economic growth.
“Recent investor psychology was that the worst of the financial liquidity crisis is over, but in reality, it is recessionary fears that could drive this market to new lows,” said Jason McNab, who helps manage about US$1.7 billion at Duet Asset Management Ltd in London.
Analysts this week forecast for the first time that European companies’ earnings will shrink this year. They estimate a 0.1 percent decline, compared with a growth projection of 11 percent at the end of last year, Bloomberg data show.
Crude oil futures in New York climbed to a record high of US$112.21 a barrel on Wednesday after the US Energy Department reported an unexpected decline in US inventories.
National benchmarks decreased in 16 of the 18 western European markets. Germany’s DAX Index slipped 2.4 percent, while France’s CAC 40 lost 2.1 percent. The UK.’s FTSE 100 dropped 0.9 percent. The STOXX 50 retreated 2.5 percent, as did the Eur STOXX 50, a measure for the Europe region.
Indexes extended declines on Friday after General Electric Co, the world’s third-biggest company by market value, reported profit that fell short of analysts’ estimates and its own forecast. The company also reduced its full-year guidance.
“When a bellwether like GE misses the earnings forecast, it is like an exclamation mark,” Carsten Klude, head of investment strategy at M.M. Warburg & Co in Hamburg, said in a Bloomberg Television interview. “We haven’t seen the end of the downward earnings revisions yet.”
Deutsche Boerse retreated 8.3 percent. The operator of the Frankfurt bourse said on Tuesday that its Clearstream settlement division processed fewer transactions last month.
The navy has installed 13 Phalanx Block 1B close-in weapons systems on its warships, increasing their defensive firepower, a defense official said on Saturday. The systems cost the navy NT$10.16 billion (US$314.67 million), while eight additional Block 1A systems are being upgraded in the US and are expected to be delivered next year, the official said, speaking on condition of anonymity. The Phalanx system used by Taiwan to defend its warships and key radar installations is a radar-cued gun system capable of firing 4,500 rounds a minute at targets as far away as 1.5km, the official said. With their superior range of
RACE FOR CHIPS: The Dresden site would help Europe reduce its reliance on Asia for semiconductors, while Germany aims to produce one-fifth of the world’s chips by 2030 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday broke ground in Dresden, Germany, on its first European plant as the continent seeks to safeguard its chip supplies amid growing US-China tensions. TSMC chief executive C.C. Wei (魏哲家) attended the event, together with European Commission President Ursula von der Leyen, German Chancellor Olaf Scholz, and the heads of Infineon Technologies AG, NXP Semiconductors NV and Robert Bosch GmbH, which each hold a 10 percent stake in the venture. TSMC owns a 70 percent stake in the plant. “Together with our partners, Bosch, Infineon and NXP, we are building our Dresden facility to meet the
RECOVERY: Overall, average income across all age groups increased, climbing to a record NT$709,000 last year, on the back of an improved economy, the DGBAS said Taiwanese workers under the age of 30 last year, on average, earned an annual income of NT$545,931 (US$17,044), a new high, as the economy continued to improve, data released by the Directorate-General of Budget, Accounting and Statistics (DGBAS) showed. That equated to monthly earnings of NT$45,494 per person, and marked an increase from NT$535,667 in 2022, the data showed. In addition to an improved economy, average incomes rose as the unemployment rate declined and the minimum wage rose, the statistics agency said. Overall, average income in Taiwan also hit a new record of NT$709,000 last year, up from NT$704,000 in 2022, the data
CARROT AND STICK: Palauan president said in 2020 the Chinese ambassador to a neighboring country pledged to flood his country with tourists if it switches alliance Beijing weaponized tourism to the Pacific archipelago of Palau over its allegiance to Taiwan and its accusations that China was behind a major cyberattack there, Palauan President Surangel Whipps Jr told The Associated Press (AP). Palau, along with Tuvalu and the Marshall Islands, is one of the three Pacific nations to recognize Taiwan as an independent democracy. Taipei’s allies in the Pacific have dwindled from six countries in 2019. Nauru abandoned its ties in January. Whipps told the AP in an interview late on Thursday that, in 2020, while he was running for his current post, the Chinese ambassador to a neighboring country