European stocks capped the first weekly decline in more than a month as investors speculated share prices have outpaced the outlook for economic growth and corporate earnings.
Rio Tinto Group, the world’s third-largest mining company, and Royal Dutch Shell PLC, Europe’s biggest oil producer, fell with copper and crude prices. DSG International PLC, Europe’s second-largest electronics goods retailer, slid 15 percent after UK retail sales unexpectedly retreated. K+S AG sank 21 percent as the potash producer forecast a drop in sales and earnings.
The Dow Jones STOXX 600 Index lost 2.8 percent to 208.28 in the week, the biggest drop since the week ended on May 15. A three-month, 36 percent surge through the end of last week had left the measure trading at 25.4 times profit, the highest level since 2004, according to weekly data compiled by Bloomberg.
“It’s not surprising that we saw some profit taking after the tremendous rally,” said Gerold Kuehne, who manages about US$115 million at LLB Asset Management AG in Vaduz, Liechtenstein. “The economy determines the direction of the markets and we saw that if data is better than expected, like US leading indicators, it still has the potential to give the market a boost.”
European stocks pared the weekly loss after reports showed the US leading economic indicators index climbed for a second straight month last month and the number of Americans receiving unemployment benefits dropped for the first time since January.
Even so, US industrial production fell last month for the 16th time in the last 17 months, reflecting declines in consumer goods and business equipment that signals the manufacturing slump remains broad-based.
EU leaders spotted the first signs of a “sustainable economic recovery” and started planning to roll back budget deficits piled up to combat the financial crisis. The 27 government heads said the looming end of the slump means it is time to start hatching an “exit strategy.” They also agreed to overhaul financial regulation after banking supervision failed to contain the crisis.
National benchmark indexes fell in all 18 western European markets. The UK’s FTSE 100 dropped 2.2 percent as Lonmin PLC tumbled. France’s CAC 40 lost 3.2 percent as Michelin & Cie fell, while Germany’s DAX slid 4.5 percent.
A measure of basic-resources shares in the STOXX 600 retreated 9.5 percent, the second-biggest decline among 19 industry groups.
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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