European stocks dropped for a sixth straight month, the longest losing streak since 2002, on concern the worsening global economic slump will wipe out earnings.
Novartis SA, Switzerland’s second-biggest drugmaker, slid 6.4 percent this week after saying first-quarter profit will be hurt, and Basilea Pharmaceutica AG tumbled 49 percent after reporting a full-year loss. Renault SA, France’s second-largest carmaker, fell 9.4 percent as its credit ratings were cut to junk by Moody’s Investors Service. Compania Espanola de Petroleos SA sank 44 percent after Banco Santander SA said it may sell its holding in Spain’s second-largest oil company.
The Dow Jones STOXX 600 Index slipped 2.3 percent to 172.92 this week, bringing the February slump to 9.6 percent. The measure has fallen 52 percent since the start of last year as credit-related losses at financial firms worldwide reached US$1.1 trillion and Europe, the US and Japan fell into the first simultaneous recessions since World War II.
“There is reason to be worried,” said Kilian de Kertanguy, a Paris-based fund manager at Cholet-Dupont Gestion, which oversees about US$2.3 billion. “Everyone is saying there won’t be good news in the market during the first half.”
German business confidence declined to a 26-year low last month, a report by the IFO institute showed this week. The UK economy contracted the most since 1980 in the fourth quarter as the financial crisis prompted spending by consumers and companies to shrivel, according to data from the Office for National Statistics.
National benchmark indexes fell in 15 of the 18 western European markets this week. Germany’s DAX Index lost 4.3 percent as Deutsche Post AG dropped, while France’s CAC 40 retreated 1.8 percent. The UK’s FTSE 100 slipped 1.5 percent, with Royal Bank of Scotland Group Plc limiting the decline.
Health-care shares retreated 7.2 percent as a group, the second-worst performance among 19 industries in the STOXX 600 after automotive companies.
Earnings at companies in the STOXX 600 are expected to rise 14 percent this year following a 37 percent slump last year, according to analysts’ estimates compiled by Bloomberg.
Banks in the STOXX 600 climbed a combined 2.8 percent. The sub-index, which is down 25 percent so far this year, pared its weekly advance after the US Treasury agreed to a third rescue attempt for Citigroup Inc that will cut existing shareholders’ stake in the company by 74 percent.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
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