European stocks closed lower on Friday in a volatile session, with credit-market jitters again reverberating through the market as Cadbury Schweppes delayed the sale of its US beverage unit on worries over the financing that potential buyers could receive.
A shaky FTSE 100 index lost 0.6 percent to close at 6,215.20, a day after London's biggest one-day selloff in percentage terms in four years -- a retreat that resulted in the index's biggest weekly loss since 2002.
The German DAX 30 index gave up 0.8 percent to stand at 7,451.68 while the French CAC-40 index dropped 0.6 percent to 5,643.96.
All European indexes closed with sharp losses on Thursday, as Wall Street plunged on concerns about shaky credit markets and the troubled US housing sector.
One of the main concerns for European and US investors is that takeover activity engineered by private-equity firms -- one of the key reasons for several European markets recently hitting all-time highs recently -- could dry up.
"Stocks have been supported by takeover hopes. As finance becomes more expensive, this support is disappearing," said Jeremy Chantry, head of research at London-based stockbroker Hichens, Harrison & Co.
Eric Vergnaud, an economist at BNP Paribas, said markets may be overlooking positive signs.
"In a tumultuous week, some key news almost went unnoticed: the IMF raised its forecast for world growth, which is now expected to exceed 5 percent in both 2007 and 2008, after 5.5 percent last year and 4.9 percent in 2005," he told clients.
"The dynamic momentum of the emerging countries, led by China, India and Russia, have driven up world economic performances, and a new equilibrium is taking shape that no longer depends on the performances of the US, Japan or Europe," Vergnaud said.
A case in point came from candy and beverage group Cadbury Schweppes, which said it's decided to extend the sale timetable for its US beverages business following volatility seen in the leveraged debt markets. Cadbury shares rose 2.4 percent as investors expressed relief that the sale wasn't scrapped.
Across the 13-nation eurozone, the EuroStoxx 50 index was off by 0.26 percent at 4,242.05 points.
In Amsterdam, the AEX index gave up an additional 1.19 percent to 526.69 points, while the Swiss SMI was essentially unchanged at 8,705.57 points.
In Milan the SP/MIB was down 0.23 percent at 39,581 points, but in Madrid the Ibex-35 bucked the overall trend and gained 0.32 percent to 14,587.50 points.
Brussels' BEL-20 closed 0.64 percent lower at 4,341.99 points.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
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