European stocks completed the fourth weekly decline on mounting concern that record oil prices, higher borrowing costs and slowing economic growth will erode earnings.
Daimler AG, the world’s second-largest maker of luxury cars, and Ryanair Holdings Plc paced a retreat in companies sensitive to fuel costs as crude rose above US$142 for the first time. Carrefour SA, Europe’s biggest retailer, led retail stocks lower after scaling back forecasts for operating profit and sales.
“High energy costs and oil prices are hampering economic growth,” Wolfgang Matejka, who oversees about US$3 billion as chief investment officer at Vienna-based Meinl Bank AG, said in a Bloomberg Television Interview on Friday.
Europe’s Dow Jones STOXX 600 Index tumbled 2.6 percent to 287.34 this week.
The measure is poised for the worst first half since at least 1987 as record oil prices, inflation and credit-market losses approaching US$400 billion are weighing on shares.
Earnings for companies in the STOXX 600 are expected to drop 0.5 percent this year, compared with 11 percent growth forecast at the end of last year, according to data compiled by Bloomberg.
“Financial markets are doing badly and I believe it will be two to three years from now until this bear market is over,” Uto Baader, chairman of brokerage Baader Wertpapierhandelsbank AG in Unterschleissheim, Germany, said in a Bloomberg Television interview on Friday.
“The subprime crisis, narrowly speaking, is almost over. But the consequences for the real economy are just beginning to be felt,” Baader said.
Daimler dropped 10 percent and Ryanair, Europe’s biggest discount airline, retreated 11 percent.
Lehman Brothers Holdings Inc lowered its earnings estimate for the European car industry for this year by 6 percent and cut its share-price estimates for automakers including Daimler, citing “headwinds” from higher raw-material prices in a report.
Bayerische Motoren Werke AG, the world’s biggest luxury carmaker, declined 6.8 percent and Fiat SpA, Italy’s largest manufacturer, fell 11 percent.
Carmakers in the region face the risk of a 1970s-style oil-price shock, Credit Suisse Group AG wrote in a note June 23.
European retail sales plunged this month as soaring fuel and food prices hit consumers’ budgets, prompting stores to cut jobs and lose confidence about their prospects, the Bloomberg purchasing managers index showed.
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
SECURITY: The purpose for giving Hong Kong and Macau residents more lenient paths to permanent residency no longer applies due to China’s policies, a source said The government is considering removing an optional path to citizenship for residents from Hong Kong and Macau, and lengthening the terms for permanent residence eligibility, a source said yesterday. In a bid to prevent the Chinese Communist Party (CCP) from infiltrating Taiwan through immigration from Hong Kong and Macau, the government could amend immigration laws for residents of the territories who currently receive preferential treatment, an official familiar with the matter speaking on condition of anonymity said. The move was part of “national security-related legislative reform,” they added. Under the amendments, arrivals from the Chinese territories would have to reside in Taiwan for
CRITICAL MOVE: TSMC’s plan to invest another US$100 billion in US chipmaking would boost Taiwan’s competitive edge in the global market, the premier said The government would ensure that the most advanced chipmaking technology stays in Taiwan while assisting Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in investing overseas, the Presidential Office said yesterday. The statement follows a joint announcement by the world’s largest contract chipmaker and US President Donald Trump on Monday that TSMC would invest an additional US$100 billion over the next four years to expand its semiconductor manufacturing operations in the US, which would include construction of three new chip fabrication plants, two advanced packaging facilities, and a research and development center. The government knew about the deal in advance and would assist, Presidential
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