European stocks fell this week after the US Federal Reserve said the pace of economic recovery was likely to be “more modest” than forecast and European industrial production unexpectedly declined.
Vedanta Resources PLC retreated 20 percent after saying it was in talks with Cairn Energy PLC to buy a stake in the oil explorer’s Indian unit. Micro Focus International PLC fell the most in the STOXX Europe 600 Index after it cut its revenue forecast. Food and beverage shares posted the biggest gain of 19 industry groups after Anheuser-Busch InBev NV reported second-quarter net income that beat forecasts.
The STOXX 600 fell 1.2 percent to 255.56, paring last week’s 1.3 percent rally. The gauge is trading 6.1 percent below this year’s high on April 15 because of concern that the global economic recovery is losing steam as indebted European governments slash spending and China takes steps to tame inflation.
Initial jobless claims in the US rose by 2,000 to 484,000 last week, the highest level in five months, Labor Department figures showed on Thursday. Economists had forecast claims would fall to 465,000, according to the median of 42 predictions in a Bloomberg News survey. Estimates ranged from 450,000 to 480,000.
European industrial production unexpectedly declined in June, led by a drop in durable consumer goods, such as furniture and home appliances. The industrial output of the 16 nations that use the euro dropped 0.1 percent from May, when it increased by 1.1 percent, the EU’s statistics office in Luxembourg said. Economists had predicted a gain of 0.6 percent, the median forecast in a Bloomberg survey showed.
National benchmark indices retreated in all 18 western European markets except Iceland. Germany’s DAX decreased 2.4 percent, the UK’s FTSE 100 dropped 1.1 percent and France’s CAC 40 slumped 2.8 percent.
European construction shares were the worst performing industry this week, dropping 5 percent. HeidelbergCement AG, the largest maker of aggregates used to produce concrete and asphalt, plunged 10 percent. Wienerberger AG, the world’s biggest brickmaker, fell 7.7 percent.
Vedanta, controlled by billionaire Anil Agarwal, lost 20 percent. The copper, zinc, aluminum and iron ore producer wants to acquire more than 50 percent of Cairn India Ltd, leaving the unit’s management in place, said two people with knowledge of the matter who declined to be identified because the talks are private.
Micro Focus, the UK business software maker whose clients include Tesco PLC, sank 33 percent. First-quarter underlying revenue was “flat,” missing management forecasts, the company said. Micro Focus predicted “low single-digit like-for-like revenue growth in the 2011 financial year instead of mid single-digit growth.”
Nobel Biocare Holding AG sank 14 percent, the stock’s biggest weekly decline since April. The company said second-quarter net income dropped 31 percent as expenses increased and the company’s sales failed to keep pace with its two closest competitors.
European food and beverage shares posted the best performance this week as Anheuser-Busch InBev reported net income of US$1.15 billion from US$1.07 billion a year earlier, beating the US$1.08 billion average of 11 analyst estimates compiled by Bloomberg.
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
South Korean President Yoon Suk-yeol yesterday declared emergency martial law, accusing the opposition of being “anti-state forces intent on overthrowing the regime” amid parliamentary wrangling over a budget bill. “To safeguard a liberal South Korea from the threats posed by North Korea’s communist forces and to eliminate anti-state elements plundering people’s freedom and happiness, I hereby declare emergency martial law,” Yoon said in a live televised address to the nation. “With no regard for the livelihoods of the people, the opposition party has paralysed governance solely for the sake of impeachments, special investigations, and shielding their leader from justice,” he
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
HIGH ALERT: The armed forces are watching for a potential military drill by China in response to the president’s trip, with the air force yesterday conducting an exercise President William Lai (賴清德) is to make stopovers in Hawaii and the US territory of Guam during his seven-day trip to the South Pacific, his first official visit since taking office in May, the Presidential Office said yesterday. Lai, accompanied by a delegation, is scheduled to depart for the South Pacific on a chartered flight at 4:30pm tomorrow, stopping first in Hawaii for a two-night layover before traveling to the Marshall Islands, an office official said. After wrapping up his visits to the Marshall Islands and Tuvalu, the president is to transit through Guam, spending a night there before flying to Palau,
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