European stocks dropped for a fourth straight week, the longest stretch of losses since March, as oil retreated and concern mounted that earnings reports will show the economic slump is far from over.
Royal Dutch Shell PLC, BP PLC and Total SA slid more than 3 percent as crude headed for the biggest weekly drop since January. Aviva PLC led insurers lower on speculation it will cut its dividend.
Renault SA, France’s second-largest automaker, sank 11 percent as chief executive officer Carlos Ghosn said the expiration of state-backed sales incentives will offset any improvement in demand next year.
The Dow Jones STOXX 600 Index declined 3.4 percent in the past week to 197.25, the lowest since April. The measure has slumped 8.2 percent since June 11 on speculation share prices have outpaced the outlook for economic growth after a three-month rally pushed valuations to 25.4 times earnings, the highest level since 2004.
“We are still in a consolidation phase after the gains we saw in March and April,” said Daniel Knuchel, who oversees about US$3 billion as chief investment officer at AAM Privatbank AG in Zurich. “The risk appetite has clearly retreated since then and sentiment is less positive. Markets are very news driven and investors are waiting for the earnings season.”
The IMF forecast the global economy will shrink 1.4 percent this year before expanding 2.5 percent next year. In April, the Washington-based lender had predicted a 1.3 percent contraction this year, followed by 1.9 percent growth next year.
National benchmark indexes fell in all 18 western European markets. The UK’s FTSE 100 slipped 2.6 percent and France’s CAC 40 retreated 4.4 percent. Germany’s DAX dropped 2.8 percent as Porsche SE declined.
Shell, Europe’s biggest oil company, decreased 3.8 percent in London. BP and Total, the second and third-largest, slid 3.7 percent and 4.6 percent respectively.
Aviva, the UK’s largest insurer, tumbled 19 percent, dragging a gauge of insurers 6.7 percent lower for the biggest decline among 19 industry groups in the STOXX 600.
“We estimate that Aviva cannot rule out reducing its dividend distribution by 20 percent at least this year,” CA Cheuvreux analyst Jean D’Herbecourt in Paris wrote in a report on Tuesday, reducing his recommendation on the stock to “underperform” from “outperform.”
Bloomberg’s analysis and research showed on Friday that the insurer may reduce its interim dividend next month to £0.0875 a share from £0.1309 last year.
Infineon Technologies AG surged 12 percent. Europe’s second-largest chipmaker agreed to sell its Wireline Communications business to an affiliate of Golden Gate Capital Corp for 250 million euros (US$346 million).
SUPPORT: Arms sales to NATO Plus countries such as Japan, South Korea and Israel only have to be approved by the US Congress if they exceed US$25m The US should amend a law to add Taiwan to the list of “NATO Plus” allies and streamline future arms sales, a US commission said on Tuesday in its annual report to the US Congress. The recommendation was made in the annual report by the US-China Economic and Security Review Commission (USCC), which contained chapters on US-China economic and trade ties, security relations, and Taiwan and Hong Kong. In the chapter on Taiwan, the commission urged the US Congress to “amend the Arms Export Control Act of 1976 to include Taiwan on the list of ‘NATO Plus’ recipients,” referring to
Taiwan yesterday advanced to the gold medal match of the World Baseball Softball Confederation’s (WBSC) Premier12 for the first time in history, despite last night losing 9-6 to Japan. Taiwan advanced after the US defeated Venezuela in the first game on the last day of the Super Round. However, the US had no chance of advancing to the championship game unless it defeated Venezuela by at least nine points. The US won 6-5. As a result, the two teams — who both had one win and two losses in the Super Round — are to face off again in the
Minister of Labor Ho Pei-shan (何佩珊) said she would tender her resignation following criticism of her handling of alleged bullying by Ministry of Labor Workforce Development Agency branch director Hsieh Yi-jung (謝宜容) resulting in the death of an employee. The ministry yesterday gave Hsieh two demerits and said she is subject to review by the Disciplinary Court. The severest possible punishment would be her removal from office and being barred from government jobs indefinitely. Workforce Development Agency Director-General Tsai Meng-liang (蔡孟良) also received a major demerit and was transferred to another position. Premier Cho Jung-tai (卓榮泰) issued a formal apology
FREEDOM CURTAILED: The conviction of 45 democracy advocates proves the ‘unworkability’ of Beijing’s ‘one country, two systems’ model, the Presidential Office said Taiwan yesterday condemned China over the jailing of 45 Hong Kong activists, saying “democracy is not a crime.” The government “strongly condemned the Chinese government’s use of judicial measures and unfair procedures to suppress the political participation and freedom of speech of Hong Kong’s pro-democracy activists,” Presidential Office spokeswoman Karen Kuo (郭雅慧) said in a statement. International condemnation of the jailings has been swift, with the US, Australia and rights groups slamming the sentencing as evidence of the erosion of political freedoms in the territory since Beijing imposed a national security law in 2020. Yesterday’s sentencing “not only breaks the promises of ‘50
RSS