European stocks rose for a third straight week after Standard & Poor’s said it was no longer planning an imminent downgrade of Greece’s debt and as the US Federal Reserve repeated a pledge to maintain record-low borrowing costs for an extended period.
UniCredit SpA gained 4.7 percent after Italy’s biggest bank posted earnings that beat estimates. Lloyds Banking Group PLC rallied after saying it may be profitable this year. Arriva PLC jumped 24 percent after the operator of Britain’s longest rail route said it received a takeover approach.
The STOXX Europe 600 Index gained 0.7 percent to 260.20, a third straight weekly advance. The measure retreated for the first two months of 2010 amid concern that Greece will struggle to rein in Europe’s biggest budget deficit.
“We were strongly caught in uncertainty over Greece, which hasn’t gone away but has brightened up,” said Rolf Biland, Zurich-based chief investment officer at VZ Vermoegenszentrum, which oversees about US$5.7 billion. “Markets are reacting again to the state of the economy and debt concerns have moved to the background. In the short-term we may see the recovery continue.”
Greece had the threat of a cut to its credit rating reduced by S&P, which cited the country’s efforts to narrow a budget deficit that is more than four times the EU’s 3 percent limit. S&P affirmed the nation’s BBB+ rating, removing it from “creditwatch negative,” meaning the company is no longer considering an imminent reduction to the grade.
Officials from the 16 countries using the euro this week worked out a strategy for emergency loans in case Greece’s plan for 4.8 billion euros (US$6.6 billion) in tax increases and wage cuts fails to bring the deficit under control.
Acting Dutch Finance Minister Jan Kees de Jager said the IMF “will probably do part” of Greece’s financing needs. The EU said that “all EU states” are determined to help Greece if needed.
The STOXX 600 has surged 65 percent since March 9 last year as governments and central banks around the world maintained low interest rates and committed more than US$12 trillion to stimulate the economy.
The Fed said low rates were still needed to drive the world’s largest economy. The US central bank also said the labor market is stabilizing and business spending has risen, while inflation remains subdued.
National benchmark indexes rose in 12 out of 18 western European markets. The UK’s FTSE 100 rose 0.4 percent and Germany’s DAX advanced 0.6 percent, while France’s CAC 40 dropped 0.1 percent. Greece’s ASE Index slid 3.1 percent as the nation’s banks tumbled.
DISRUPTIONS: The high-speed rail is to operate as normal, while several airlines either canceled flights or announced early departures or late arrivals Schools and offices in 15 cities and counties are to be closed today due to Typhoon Gaemi, local governments announced last night. The 15 are: Taipei, New Taipei City, Taoyuan, Tainan, Keelung, Hsinchu and Kaohsiung, as well as Yilan, Hualien, Hsinchu, Miaoli, Chiayi, Pingtung, Penghu and Lienchiang counties. People should brace for torrential rainfall brought by the storm, with its center forecast to make landfall on the east coast between tonight and tomorrow morning, the Central Weather Administration (CWA) said. The agency issued a sea warning for the typhoon at 11:30pm on Monday, followed by a land warning at 11:30am yesterday. As of
CASUALTY: A 70-year-old woman was killed by a falling tree in Kaohsiung as the premier warned all government agencies to remain on high alert for the next 24 hours Schools and offices nationwide are to be closed for a second day today as Typhoon Gaemi crosses over the nation, bringing torrential rain and whipping winds. Gaemi was forecast to make landfall late last night. From Tuesday night, its outer band brought substantial rainfall and strong winds to the nation. As of 6:15pm last night, the typhoon’s center was 20km southeast of Hualien County, Central Weather Administration (CWA) data showed. It was moving at 19kph and had a radius of 250km. As of 3pm yesterday, one woman had died, while 58 people were injured, the Central Emergency Operation Center said. The 70-year-old
SEA SEARCH: Nine crew members of a cargo ship had taken to the water after the vessel sunk off the southern coast, with a rescue effort under way, officials said The strongest typhoon to hit Taiwan in eight years yesterday killed three people and flooded parts of the nation’s second-biggest city, while rescuers were searching for nine sailors after their cargo ship sank in the storm. Typhoon Gaemi transformed streets in Kaohsiung into rivers, with some households flooded. Offices and schools were closed for the second consecutive day, with thousands of people evacuated. Three people died and 380 were injured due to strong winds and torrential rainfall brought by Typhoon Gaemi, the Central Emergency Response Center said. The typhoon made landfall in Yilan County’s Nanao Township (南澳) at midnight yesterday and departed Taiwan
SEVEN-YEAR TERM: Three other defendants were found guilty and sentenced in the trial over legislative office salaries, while a fourth was found not guilty of all charges Anne Kao (高虹安) yesterday was sentenced to seven years and four months in prison and suspended as Hsinchu mayor after the Taipei District Court found her guilty of contravening the Anti-Corruption Act (貪污治罪條例) and the Criminal Code. The court also deprived Kao of her civil rights for four years and she was suspended from office by the Ministry of the Interior. Article 78 of the Local Government Act (地方制度法) stipulates that a mayor of a special municipality will be suspended from office if they are found guilty of contravening the Anti-Corruption Act. Kao was accused of taking for her own use more than