European stocks fell for a seventh week on concern efforts by US policymakers and regulators to stem credit-market losses won't be enough to keep the world's largest economy from sliding into a recession.
Societe Generale SA dropped the most in more than five years after saying bets on stock-index futures by a rogue trader caused a 4.9 billion euro (US$7.1 billion) trading loss, the biggest in banking history. E.ON AG and RWE AG, Germany's largest utilities, led the Dow Jones Europe STOXX Utilities Index to its worst week since September 2001 as power prices declined and EU regulators outlined tighter restrictions on emissions.
The STOXX 600 Index retreated 1.6 percent to 322.23 in the past week, the longest falling streak since October 1998. The measure slumped the most since the Sept. 11, 2001, terrorist attacks on Monday. It clawed back some losses after the Federal Reserve's emergency interest-rate cut the following day and as talks to bail out bond insurers started.
"We're on the brink of a recession in the US and the danger is that it will spill over to Europe," said Ulf Moritzen, who helps manage the equivalent of US$8 billion at Nordinvest in Hamburg. "If the world's biggest economy goes down, all are affected."
The Fed lowered its benchmark lending rate by 0.75 percentage point to 3.5 percent on Tuesday. New York State regulators met with banks Wednesday to ask them to extend capital to bond insurers and stave off credit-rating reductions. A rescue would need to be arranged before Moody's Investors Service and Standard & Poor's complete their reviews in the next few weeks.
"The Fed is starting to realize just how serious the situation is and, at last now, is in front of the curve," said Jonathan Monk, a fund manager at Aerion Fund Management in London, which oversees about US$23 billion.
National benchmarks fell in 12 of the 18 western European markets. Germany's DAX Index slumped 6.8 percent in the week and France's CAC 40 decreased 4.2 percent. The UK's FTSE 100 lost 0.6 percent. The STOXX 50 dropped 3.2 percent. The Euro STOXX 50, a measure for the euro region, retreated 5.5 percent.
Societe Generale sank 13 percent, the biggest weekly decline since the week ended Oct. 4, 2002. France's second-largest bank said Jerome Kerviel, 31, was the trader responsible for the trading loss. Kerviel secretly set up unauthorized positions, going beyond permitted limits on futures linked to European stock indexes, Societe Generale said.
E.ON, Germany's largest utility, lost 13 percent, the steepest drop since the week ended Oct. 2, 1998. RWE, the second-biggest, decreased 12 percent.
The STOXX Utilities Index lost 7.1 percent, the worst drop since the week of the Sept. 11 terrorist attacks.
Electricity for next year in Germany, Europe's biggest power market, had fallen 6.7 percent as of Wednesday from a Jan. 8 record of 63.25 euros a megawatt-hour, following declines in fuel and emission permits. Dutch prices also slid 6.7 percent in the period.
The EU will probably make its 2020 greenhouse-gas reduction target stricter, requiring emission cuts of 30 percent from 1990 levels, because nations will reach a new climate-protection agreement, an official said.
Gaz de France SA, owner of Europe's largest natural-gas network, retreated 8.3 percent.
Sanofi-Aventis SA, France's largest manufacturer of pharmaceuticals, and GlaxoSmithKline Plc, the world's second-biggest, declined after regulatory setbacks.
Sanofi fell 9.3 percent. The company's experimental stroke drug Idraparinux caused more bleeding in some patients than a standard treatment in a study stopped ahead of schedule in 2005, researchers writing in the Lancet said.
Glaxo dropped 7.8 percent. The company's Avandia diabetes pill shouldn't be prescribed for patients with some heart conditions, European regulators said on Thursday.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald
UNCERTAINTY: Investors remain worried that trade negotiations with Washington could go poorly, given Trump’s inconsistency on tariffs in his second term, experts said The consumer confidence index this month fell for a ninth consecutive month to its lowest level in 13 months, as global trade uncertainties and tariff risks cloud Taiwan’s economic outlook, a survey released yesterday by National Central University found. The biggest decline came from the timing for stock investments, which plunged 11.82 points to 26.82, underscoring bleak investor confidence, it said. “Although the TAIEX reclaimed the 21,000-point mark after the US and China agreed to bury the hatchet for 90 days, investors remain worried that the situation would turn sour later,” said Dachrahn Wu (吳大任), director of the university’s Research Center for
RSS