European stocks fell this past week, led by financial companies and commodity producers on concern corporate earnings may deteriorate further as the global economic slowdown deepens.
BNP Paribas SA tumbled 31 percent after saying losses at its investment bank since October more than wiped out the division’s profit this year.
Royal Bank of Scotland Group Plc lost 23 percent after disclosing investments with Bernard Madoff, the investment adviser who was arrested in a potential US$50 billion fraud. BG Group Plc and Xstrata Plc both sank more than 3 percent as crude oil plunged below US$36 a barrel and metal prices fell.
The Dow Jones Stoxx 600 Index retreated 0.9 percent this week to 196.43, bringing its decline this year to 46 percent as credit losses and writedowns at the world’s largest banks surpassed US$1 trillion and the US, Europe and Japan entered the first simultaneous recessions since World War II.
“The economic slowdown is reflected in the price of oil,” said Chicuong Dang, an analyst at KBL Richelieu Gestion in Paris, which has about US$5.6 billion under management. “It shows that the market context is very difficult. We have to expect further downgrades of ratings and profit warnings. There’s a lot of volatility to come.”
The Stoxx 600 dropped every day this week except on Tuesday.
The US Federal Reserve this week cut its benchmark interest rate to as low as zero for the first time and pledged to use “all available tools” to spur economic growth.
US president-elect Barack Obama may ask Congress to approve a stimulus plan of around $850 billion.
The European Central Bank also cut the rate it pays institutions to deposit money with it overnight in an effort to jolt banks into lending more to each other.
National benchmark indexes rose in 10 out of 18 western European markets. Germany’s DAX gained 0.7 percent. Britain’s FTSE 100 rose 0.2 percent and France’s CAC 40 added 0.4 percent.
The Dow Jones Europe Stoxx Banks Index fell 6.5 percent in the week, the sharpest retreat among 19 industry groups.
BNP, France’s largest bank, plunged 31 percent. The corporate and investment division had a 710 million euro (US$981 million) pretax loss in the first 11 months of the year and may cut about 800 jobs, or 5 percent of the unit’s staff.
Separately, a Belgian court froze the lender’s plans to buy Fortis assets and the bank said it has as much as 350 million euros at risk from investments with Madoff.
Fortis, the insurer that was once Belgium’s largest financial services company, rallied 22 percent in Brussels.
HSBC Holdings Plc slipped 16 percent. CLSA Asia-Pacific Markets said Europe’s largest bank may seek to raise about US$14 billion as increasing bad-loan provisions erode profits. HSBC also has US$1 billion at risk after providing financing to funds that invested with Madoff.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday held an equipment installation ceremony for its first 2-nanometer fab in Kaohsiung, six months ahead of schedule, Kaohsiung Mayor Chen Chi-mai (陳其邁) said. “To cope with the strong global demand for advanced chips, TSMC is to start moving in equipment for its first-ever 2-nanometer fab half a year earlier than scheduled,” Chen said at an question-and-answer session at the Kaohsiung City Council. TSMC’s 2-nanometer process technology would help accelerate the development of artificial intelligence (AI) applications as well as the transformation of local industries in Kaohsiung, Chen said in a
TEAM TAIWAN: While lawmakers proposed declaring Nov. 24 a national day, the CPBL commissioner urged the legislature to pass the budget for sports development Lawmakers yesterday proposed designating Nov. 24 as National Baseball Day and updating the design of the NT$500 bill to honor the national team’s victory in the World Baseball Softball Confederation’s Premier12 championship on Sunday, as thousands of fans came out to see the players parade down the streets of Taipei. Players, coaches and staff from the national team returned home on Monday night after achieving their best-ever performance in an international baseball tournament. After receiving a rapturous welcome at the airport, the players turned out yesterday for a street parade in front of thousands of adoring fans waving Taiwanese flags and
Taiwan moved clear of Mexico to be the only country at No. 2 in the World Baseball Softball Confederation (WBSC) Men’s Baseball World Rankings. Meanwhile, draft bills to set up a ministry of sports were approved at a joint session at the legislature in Taipei yesterday. After previously being tied with Mexico for second on 4,118 points, Taiwan moved clear on 5,498 points after they defeated Japan in the final of the WBSC Premier12 tournament on Sunday. Mexico (4,729) dropped to fourth, behind Venezuela (4,846), who finished fourth at the tournament. Taiwan narrowed the gap to first-placed Japan to 1,368 points from 1,638, WBSC
GLOBAL SUPPORT: The Ministry of Foreign Affairs said that the motion highlighted the improper exclusion of Taiwan from international discussion and cooperative mechanisms Taiwan yesterday thanked the British parliament for passing a motion stating that UN Resolution 2758 does not involve Taiwan, making it the latest body to reject China’s interpretation of the resolution. The House of Commons on Thursday debated the international status of Taiwan and unanimously passed a pro-Taiwan motion stating that the House “notes that UN Resolution 2758 does not address the political status of Taiwan or establish PRC [People’s Republic of China] sovereignty over Taiwan and is silent both on the status of Taiwan in the UN and on Taiwanese participation in UN agencies.” British Foreign, Commonwealth and Development Office Parliamentary
RSS