European stocks halted a two-week rally as better-than-estimated US economic data failed to allay concern that the sovereign-debt crisis will spread from Greece and Ireland to other euro-area nations.
Bank of Ireland PLC and Banco Santander SA led a selloff in banks, falling 19 percent and 3.9 percent respectively, as Moody’s Investors Service cut Ireland’s credit rating and put Spain on review for a possible downgrade.
The STOXX Europe 600 Index was little changed this week, rising 0.1 percent. Even so, the benchmark gauge has climbed 5.6 percent so far this month as economic data continued to bolster confidence in the global recovery and China refrained from raising interest rates even as its inflation rate surged. For the year, the STOXX 600 has rallied 8.9 percent.
“There has been a battle between continuing positive developments from US economic indicators and news of the debt situation in fringe European countries,” Knight Capital Europe Ltd director Ioan Smith said in London. “In truth, Europe does not yet have a convincing answer and the markets know it.”
National benchmark indices retreated in 12 of Europe’s 18 western markets. France’s CAC 40 Index gained 0.3 percent, the UK’s FTSE 100 Index rose 1 percent, while Germany’s DAX slid 0.3 percent. Italy’s FTSE MIB Index lost 2 percent as Italian Prime Minister Silvio Berlusconi fought off a challenge to his leadership, while Belgium’s BEL 20 Index fell 1.2 percent after Standard & Poor’s lowered its outlook on the country’s debt rating to negative.
EU leaders this week agreed to amend the bloc’s treaties to create a permanent debt-crisis mechanism in 2013 even as they struggled to bridge divisions over short-term steps to stabilize bond markets. The European Central Bank also said it would increase its capital base by 5 billion euros (US$6.6 billion) to 10.76 billion euros.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
SIZE MATTERS: Medium-sized hotels that do not have the support of parent groups are more vulnerable and are forced to take action, a REPro Knight Frank researcher said About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic. Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return. The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel. Occupancy rates for hotels in
‘SENSITIVE MARKETS’: The previously unannounced project would involve the company handing over control of data to a third party to sidestep privacy concerns Google has abandoned plans to offer a major new cloud service in China and other politically sensitive countries due in part to concerns over geopolitical tensions and the COVID-19 pandemic, two employees familiar with the matter said, revealing the challenges for US tech giants to secure business in those markets. In May, the search giant shut down the initiative, known as “Isolated Region” and which sought to address nations’ desires to control data within their borders, the employees said. The action was considered a “massive strategy shift,” said one of the employees, who added that Isolated Region had involved hundreds of employees
GOGOROS TO GO: The scooter maker’s CEO said that the electric vehicles ‘are the perfect complement to a program designed to stimulate the Taiwanese economy’ Minister of Economic Affairs Wang Mei-hua (王美花) yesterday announced a draw to encourage people to claim their Triple Stimulus Vouchers digitally. The prizes include movie tickets and 25 electric scooters donated by Gogoro Inc (睿能創意), Wang said. The Ministry of Economic Affairs said that it would hold a scooter draw every day for the next 10 days, beginning yesterday, after which there would be a draw every week for 15 weeks. The first winner was a Taiwan Cooperative Bank (合庫銀行) credit card user, the ministry said. The benefits of claiming the vouchers digitally extend beyond the draws, with many businesses offering special deals for