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.
Two US House of Representatives committees yesterday condemned China’s attempt to orchestrate a crash involving Vice President Hsiao Bi-khim’s (蕭美琴) car when she visited the Czech Republic last year as vice president-elect. Czech local media in March last year reported that a Chinese diplomat had run a red light while following Hsiao’s car from the airport, and Czech intelligence last week told local media that Chinese diplomats and agents had also planned to stage a demonstrative car collision. Hsiao on Saturday shared a Reuters news report on the incident through her account on social media platform X and wrote: “I
SHIFT PRIORITIES: The US should first help Taiwan respond to actions China is already taking, instead of focusing too heavily on deterring a large-scale invasion, an expert said US Air Force leaders on Thursday voiced concerns about the Chinese People’s Liberation Army’s (PLA) missile capabilities and its development of a “kill web,” and said that the US Department of Defense’s budget request for next year prioritizes bolstering defenses in the Indo-Pacific region due to the increasing threat posed by China. US experts said that a full-scale Chinese invasion of Taiwan is risky and unlikely, with Beijing more likely to pursue coercive tactics such as political warfare or blockades to achieve its goals. Senior air force and US Space Force leaders, including US Secretary of the Air Force Troy Meink and
‘BUILDING PARTNERSHIPS’: The US military’s aim is to continue to make any potential Chinese invasion more difficult than it already is, US General Ronald Clark said The likelihood of China invading Taiwan without contest is “very, very small” because the Taiwan Strait is under constant surveillance by multiple countries, a US general has said. General Ronald Clark, commanding officer of US Army Pacific (USARPAC), the US Army’s largest service component command, made the remarks during a dialogue hosted on Friday by Washington-based think tank the Center for Strategic and International Studies. Asked by the event host what the Chinese military has learned from its US counterpart over the years, Clark said that the first lesson is that the skill and will of US service members are “unmatched.” The second
STILL ON THE TABLE: The government is not precluding advanced nuclear power generation if it is proven safer and the nuclear waste issue is solved, the premier said Taiwan is willing to be in step with the world by considering new methods of nuclear energy generation and to discuss alternative approaches to provide more stable power generation and help support industries, Premier Cho Jung-tai (卓榮泰) said yesterday. The government would continue to develop diverse and green energy solutions, which include considering advances in nuclear energy generation, he added. Cho’s remarks echoed President William Lai’s (賴清德) comments in an interview last month, saying the government is not precluding “advanced and newer nuclear power generation” if it is proven to be safer and the issue of nuclear waste is resolved. Lai’s comment had
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