European stocks resumed their losses this week as interest-rate cuts failed to ease concern the economy and corporate earnings will deteriorate.
The Dow Jones STOXX 600 Index dropped 1.1 percent in the five days, following the steepest weekly gain since 2001 a week earlier.
ArcelorMittal sank 13 percent after the world’s biggest steelmaker cut production and Lafarge SA slid 9.4 percent as the largest cement producer abandoned its 2010 earnings target. Money managers Man Group PLC and 3i Group PLC dropped more than 10 percent after the value of their assets declined.
Europe’s STOXX 600 retreated 2.47 to 219.6, taking this year’s loss to 40 percent as almost US$700 billion in credit losses dragged down economic growth. Profit concern this week also overshadowed speculation that US President-elect Barack Obama may boost growth with a stimulus package.
Policymakers in the euro zone, the UK, Switzerland and Denmark lowered rates to ease the effects of the global credit squeeze. The Bank of England unexpectedly cut its benchmark lending rate by 1.5 percentage points to the lowest since 1955. The European Central Bank reduced borrowing costs by 50 basis points to 3.25 percent.
Analysts have scaled back their estimates for this year’s profits at STOXX 600 companies to a 6.8 percent drop, from an 11-percent increase forecast at the start of the year, Bloomberg data show.
The European Commission said on Monday the region’s economy probably entered a recession in the third quarter and trimmed its growth forecast for this year to 1.2 percent from 1.3 percent.
The STOXX 600 declined 13 percent last month, its worst monthly performance since September 2002, even after climbing 12 percent in the previous week.
National benchmark indexes fell in seven of 18 western European markets.
Germany’s DAX Index dropped 1 percent. France’s CAC 40 slipped 0.5 percent, while the UK’s FTSE 100 advanced 0.3 percent.
STILL COMMITTED: The US opposes any forced change to the ‘status quo’ in the Strait, but also does not seek conflict, US Secretary of State Marco Rubio said US President Donald Trump’s administration released US$5.3 billion in previously frozen foreign aid, including US$870 million in security exemptions for programs in Taiwan, a list of exemptions reviewed by Reuters showed. Trump ordered a 90-day pause on foreign aid shortly after taking office on Jan. 20, halting funding for everything from programs that fight starvation and deadly diseases to providing shelters for millions of displaced people across the globe. US Secretary of State Marco Rubio, who has said that all foreign assistance must align with Trump’s “America First” priorities, issued waivers late last month on military aid to Israel and Egypt, the
France’s nuclear-powered aircraft carrier and accompanying warships were in the Philippines yesterday after holding combat drills with Philippine forces in the disputed South China Sea in a show of firepower that would likely antagonize China. The Charles de Gaulle on Friday docked at Subic Bay, a former US naval base northwest of Manila, for a break after more than two months of deployment in the Indo-Pacific region. The French carrier engaged with security allies for contingency readiness and to promote regional security, including with Philippine forces, navy ships and fighter jets. They held anti-submarine warfare drills and aerial combat training on Friday in
COMBAT READINESS: The military is reviewing weaponry, personnel resources, and mobilization and recovery forces to adjust defense strategies, the defense minister said The military has released a photograph of Minister of National Defense Wellington Koo (顧立雄) appearing to sit beside a US general during the annual Han Kuang military exercises on Friday last week in a historic first. In the photo, Koo, who was presiding over the drills with high-level officers, appears to be sitting next to US Marine Corps Major General Jay Bargeron, the director of strategic planning and policy of the US Indo-Pacific Command, although only Bargeron’s name tag is visible in the seat as “J5 Maj General.” It is the first time the military has released a photo of an active
CHANGE OF MIND: The Chinese crew at first showed a willingness to cooperate, but later regretted that when the ship arrived at the port and refused to enter Togolese Republic-registered Chinese freighter Hong Tai (宏泰號) and its crew have been detained on suspicion of deliberately damaging a submarine cable connecting Taiwan proper and Penghu County, the Coast Guard Administration said in a statement yesterday. The case would be subject to a “national security-level investigation” by the Tainan District Prosecutors’ Office, it added. The administration said that it had been monitoring the ship since 7:10pm on Saturday when it appeared to be loitering in waters about 6 nautical miles (11km) northwest of Tainan’s Chiang Chun Fishing Port, adding that the ship’s location was about 0.5 nautical miles north of the No.
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