European stocks posted their steepest weekly decline in five years on concerns that slowing growth will curb earnings at commodity producers while banks will face higher costs as the European Central Bank (ECB) tightened lending rules.
Royal Dutch Shell PLC, Europe’s largest oil company, and BHP Billiton Ltd, the world’s biggest mining company, declined as crude and metals prices slumped. Barclays PLC, the UK’s third-largest bank, led a retreat in financial shares after the ECB clampdown. Nokia Oyj plunged 17 percent after the biggest maker of mobile phones forecast a lower market share in the third quarter.
The Dow Jones STOXX 600 Index lost 5.6 percent to 272.24 this week, its biggest slump since 2003. The measure is down 25 percent this year, led by financial firms on concern accelerating inflation and more than US$500 billion in credit-related losses will stifle profits.
“Equity markets keep on suffering from mounting concerns on global growth,” said Gabriele Miodini, Italy country chief for Morley Fund Management, which oversees about US$355.6 billion in assets. “Lack of visibility on interest rates evolution in Europe with a still-high inflation offsetting a worsening economic scenario will keep markets under pressure.”
A US government report showed that unemployment rose to the highest in five years last month, signaling the economic slowdown is worsening.
The ECB on Thursday cut its economic growth forecast for this year to 1.4 percent from 1.8 percent and its prediction for next year to 1.2 percent from 1.5 percent.
National benchmark indexes declined in all 18 western European markets. Germany’s DAX slid 4.6 percent and France’s CAC 40 fell 6.4 percent. A slump in commodity producers sent the UK’s FTSE 100 down by 7 percent.
Basic-resources companies were the worst performers in the STOXX 600 as metal prices declined. BHP lost 16 percent and Anglo American PLC skidded 21 percent.
ArcelorMittal sank 19 percent in Paris. The world’s biggest steelmaker said it will cut South African prices for the first time in a year.
Royal Dutch Shell PLC dropped 9.6 percent in Amsterdam and Total SA, Europe’s third-largest oil company, slumped 9.7 percent. Sevan Marine ASA, a Norwegian oil-service company, tumbled 25 percent, the steepest decline in the STOXX 600 this week.
ECB President Jean-Claude Trichet, concerned that some banks were abusing its willingness to make loans backed by securities most investors won’t accept, said on Thursday that the central bank would increase the so-called “haircut” on securities used as collateral for loans to 12 percent from as little as 2 percent, meaning it will lend just 88 percent of their value.
Nokia tumbled after forecasting a drop in third-quarter market share as competitors slashed prices and a new handset was delayed.
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
‘SOMETHING SPECIAL’: Donald Trump vowed to reward his supporters, while President William Lai said he was confident the Taiwan-US partnership would continue Donald Trump was elected the 47th president of the US early yesterday morning, an extraordinary comeback for a former president who was convicted of felony charges and survived two assassination attempts. With a win in Wisconsin, Trump cleared the 270 electoral votes needed to clinch the presidency. As of press time last night, The Associated Press had Trump on 277 electoral college votes to 224 for US Vice President Kamala Harris, the Democratic Party’s nominee, with Alaska, Arizona, Maine, Michigan and Nevada yet to finalize results. He had 71,289,216 votes nationwide, or 51 percent, while Harris had 66,360,324 (47.5 percent). “We’ve been through so
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