European stocks posted the biggest weekly drop since September last year as Greece moved closer to a possible exit from the euro and concern mounted that Spanish banks would need rescue.
A gauge of lenders slumped for the third week, as Banco Espirito Santo SA lost the most since at least 1993. Bankia SA lost 15 percent. Opap SA closed in Athens with the biggest slide since it sold shares to the public in 2001, after first-quarter profit decreased 21 percent.
The STOXX Europe 600 Index fell 5.2 percent to 238.88 this week. The gauge has tumbled 12 percent since this year’s high on March 16, as Greek leaders failed to form a government after elections, squabbling over austerity measures.
“The markets are signaling a risk-off attitude and signs of fatigue regarding the question about what to do with Greece are evident,” said Ben Hauzenberger, a Zurich-based fund manager at Swisscanto Asset Management AG. “Investors are wondering what will happen to the euro in the case of a Greek exit and which countries could follow in its footsteps.”
National benchmark indices fell in all the 18 Western European markets this week. The UK’s FTSE 100 declined 5.5 percent. France’s CAC 40 lost 3.9 percent and Germany’s DAX slid 4.7 percent. Greece’s ASE Index plunged 10 percent.
Greek President Karolos Papoulias failed to secure agreement on a unity government that could have avoided new elections.
The new vote, set for June 17, follows inconclusive elections that propelled the SYRIZA group, which opposes austerity measures required for an international bailout, into second place. Most opinion polls have suggested that SYRIZA may build on that support in the rerun.
“If Greece — and this is the will of the great majority — wants to stay in the euro, then they have to accept the conditions,” German Federal Minister of Finance Wolfgang Schaeuble said in Brussels on Tuesday. “Otherwise it isn’t possible. No responsible candidate can hide that from the electorate.”
Greece’s credit rating was downgraded one level to “CCC” from “B-” by Fitch Ratings on Thursday.
Separately, the European Central Bank (ECB) said it suspended lending to some Greek banks to limit its risk. ECB President Mario Draghi signaled the bank would not compromise on key principles to keep Greece in the eurozone.
Moody’s Investors Service downgraded 16 Spanish banks on Thursday, citing the nation’s recession, reduced funding access for lenders and deterioration in loan quality that will spread beyond real estate to household and company loans.
Spain’s borrowing costs rose at its bond auction that day as it sold the maximum amount of notes targeted and its 10-year bond yields approached levels that drove Greece and Portugal into bailouts.
Spanish Secretary of State of Economy and Business Support Fernando Jimenez Latorre denied speculation that Bankia, the lender with the biggest domestic asset base, was seeing a deposit flight. Bankia said in a regulatory filing that changes in the deposit level in the first half of this month “have a substantially seasonal nature” and that it does not expect “substantial changes” in coming days.
JITTERS: Nexperia has a 20 percent market share for chips powering simpler features such as window controls, and changing supply chains could take years European carmakers are looking into ways to scratch components made with parts from China, spooked by deepening geopolitical spats playing out through chipmaker Nexperia BV and Beijing’s export controls on rare earths. To protect operations from trade ructions, several automakers are pushing major suppliers to find permanent alternatives to Chinese semiconductors, people familiar with the matter said. The industry is considering broader changes to its supply chain to adapt to shifting geopolitics, Europe’s main suppliers lobby CLEPA head Matthias Zink said. “We had some indications already — questions like: ‘How can you supply me without this dependency on China?’” Zink, who also
At least US$50 million for the freedom of an Emirati sheikh: That is the king’s ransom paid two weeks ago to militants linked to al-Qaeda who are pushing to topple the Malian government and impose Islamic law. Alongside a crippling fuel blockade, the Group for the Support of Islam and Muslims (JNIM) has made kidnapping wealthy foreigners for a ransom a pillar of its strategy of “economic jihad.” Its goal: Oust the junta, which has struggled to contain Mali’s decade-long insurgency since taking power following back-to-back coups in 2020 and 2021, by scaring away investors and paralyzing the west African country’s economy.
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) received about NT$147 billion (US$4.71 billion) in subsidies from the US, Japanese, German and Chinese governments over the past two years for its global expansion. Financial data compiled by the world’s largest contract chipmaker showed the company secured NT$4.77 billion in subsidies from the governments in the third quarter, bringing the total for the first three quarters of the year to about NT$71.9 billion. Along with the NT$75.16 billion in financial aid TSMC received last year, the chipmaker obtained NT$147 billion in subsidies in almost two years, the data showed. The subsidies received by its subsidiaries —
RSS