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.
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
‘SOMETHING SPECIAL’: Donald Trump vowed to reward his supporters, while President William Lai said he was confident the Taiwan-US partnership would continue Donald Trump was elected the 47th president of the US early yesterday morning, an extraordinary comeback for a former president who was convicted of felony charges and survived two assassination attempts. With a win in Wisconsin, Trump cleared the 270 electoral votes needed to clinch the presidency. As of press time last night, The Associated Press had Trump on 277 electoral college votes to 224 for US Vice President Kamala Harris, the Democratic Party’s nominee, with Alaska, Arizona, Maine, Michigan and Nevada yet to finalize results. He had 71,289,216 votes nationwide, or 51 percent, while Harris had 66,360,324 (47.5 percent). “We’ve been through so
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