European stocks had their biggest weekly decline in more than two months after a surge in crude oil to a record US$135 a barrel sparked concern that higher fuel costs will curb profits at airlines and automakers.
Air France-KLM Group tumbled the most since the week of Sept. 11, 2001, after Europe’s largest airline posted its first quarterly loss since 2003. British Airways PLC dropped the most in six months. Porsche SE led a retreat in carmakers as Merrill Lynch & Co recommended investors sell the shares and Ford Motor Co abandoned a target of returning to profit next year.
Europe’s Dow Jones STOXX 600 Index lost 3.3 percent to 319.02, the steepest weekly decline since March. The measure is down 13 percent this year as concern that record oil prices, inflation and US$383 billion in credit losses will curb economic expansion and profit growth.
“Investors are worried that this week’s spike in oil prices is a structural move, rather than just a temporary spike,” said Tony Dolphin, director of strategy and economics at Henderson Global Investors in London, which oversees about US$125 billion. “Unsurprisingly, the focus has been on those sectors where earnings would be hardest hit, such as airlines and autos.”
Crude oil for July delivery climbed more than 5 percent this week, touching US$135.09, the highest since trading began in 1983. Prices have doubled over the last year, aided by a falling US dollar and higher global demand for raw materials.
National benchmarks dropped in all 18 western European markets except Norway. Germany’s DAX Index slipped 3 percent, while France’s CAC 40 fell 2.8 percent and the UK’s FTSE 100 sank 3.4 percent. The STOXX 50 also declined 3.4 percent and the Euro STOXX 50, a measure for the euro region, slid 3.6 percent.
Investors may face further stock-market losses, options traders on the Eurex derivatives exchange said. The VDAX-New Index, which measures the cost of insuring against declines in the DAX, climbed 16 percent to 20.68, the highest in a month and the biggest weekly increase since January.
The CIA has a message for Chinese government officials worried about their place in Chinese President Xi Jinping’s (習近平) government: Come work with us. The agency released two Mandarin-language videos on social media on Thursday inviting disgruntled officials to contact the CIA. The recruitment videos posted on YouTube and X racked up more than 5 million views combined in their first day. The outreach comes as CIA Director John Ratcliffe has vowed to boost the agency’s use of intelligence from human sources and its focus on China, which has recently targeted US officials with its own espionage operations. The videos are “aimed at
STEADFAST FRIEND: The bills encourage increased Taiwan-US engagement and address China’s distortion of UN Resolution 2758 to isolate Taiwan internationally The Presidential Office yesterday thanked the US House of Representatives for unanimously passing two Taiwan-related bills highlighting its solid support for Taiwan’s democracy and global participation, and for deepening bilateral relations. One of the bills, the Taiwan Assurance Implementation Act, requires the US Department of State to periodically review its guidelines for engagement with Taiwan, and report to the US Congress on the guidelines and plans to lift self-imposed limitations on US-Taiwan engagement. The other bill is the Taiwan International Solidarity Act, which clarifies that UN Resolution 2758 does not address the issue of the representation of Taiwan or its people in
US Indo-Pacific Commander Admiral Samuel Paparo on Friday expressed concern over the rate at which China is diversifying its military exercises, the Financial Times (FT) reported on Saturday. “The rates of change on the depth and breadth of their exercises is the one non-linear effect that I’ve seen in the last year that wakes me up at night or keeps me up at night,” Paparo was quoted by FT as saying while attending the annual Sedona Forum at the McCain Institute in Arizona. Paparo also expressed concern over the speed with which China was expanding its military. While the US
SHIFT: Taiwan’s better-than-expected first-quarter GDP and signs of weakness in the US have driven global capital back to emerging markets, the central bank head said The central bank yesterday blamed market speculation for the steep rise in the local currency, and urged exporters and financial institutions to stay calm and stop panic sell-offs to avoid hurting their own profitability. The nation’s top monetary policymaker said that it would step in, if necessary, to maintain order and stability in the foreign exchange market. The remarks came as the NT dollar yesterday closed up NT$0.919 to NT$30.145 against the US dollar in Taipei trading, after rising as high as NT$29.59 in intraday trading. The local currency has surged 5.85 percent against the greenback over the past two sessions, central
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