European stocks posted their biggest weekly advance in two months as employers in the US increased their payrolls more than forecast and optimism mounted that central banks would continue to stimulate their economies.
Vodafone Group PLC posted its largest weekly gain since November 2008 after Verizon Communications Inc was said to seek a resolution of their relationship. Fugro NV jumped after reporting earnings that beat analysts’ estimates. PSA Peugeot Citroen, Europe’s second-biggest carmaker, rallied.
The STOXX Europe 600 Index gained 2.3 percent to 295.55 this week, closing at the highest level since June 2008. The equity benchmark has surged 5.7 percent so far this year as US politicians agreed on a compromise budget and the US Federal Reserve continued its bond-buying program.
“US and European monetary policy has helped stocks,” said Jerome Forneris, a fund manager at Banque Martin Maurel in Marseille, which oversees US$8.5 billion. “And jobs data in the US was good. The market is being lifted by the economies in the US and Japan and global growth.”
In the US, a Department of Labor report showed that the economy added workers at a faster pace last month and the unemployment rate unexpectedly fell to a four-year low of 7.7 percent. Employment rose 236,000 last month after a revised 119,000 gain in January that was smaller than initially estimated, the release showed on Friday.
Fed Vice Chairman Janet Yellen said on Monday that the central bank should continue with its US$85 billion in monthly bond buying.
Yellen, who is second to Fed Chairman Ben Bernanke, said that the benefits of historically low interest rates and the near-record US$3.09 trillion balance sheet outweigh any risk of financial instability.
In Japan, GDP rose an annualized 0.2 percent in the three months through December last year, Japan’s Cabinet Office said on Friday. The world’s third-largest economy contracted 3.7 percent in the previous quarter.
In China, exports increased 21.8 percent last month from a year earlier, the country’s customs administration said on Friday.
That beat the 8.1 percent median estimate in a Bloomberg News survey. Last month had four fewer working days than in the same month last year.
The European Central Bank kept its benchmark interest rate unchanged at a record low of 0.75 percent this week. The Bank of England also left its key rate unchanged, along with its four- year-old bond-purchase program.
National benchmark indexes climbed in every western European market except Greece. France’s CAC 40 Index jumped 3.8 percent and the UK’s FTSE 100 Index rose 1.6 percent. Germany’s DAX rallied 3.6 percent.
NEW CONSIDERATIONS: An airline manager said the idea is tempting, as demand for air cargo is strong, but issues such as training loaders would need to be addressed Taiwanese airlines might repurpose passenger jets to carry cargo in their cabins to offset lost revenue amid the COVID-19 pandemic. Airlines are considering applying to the Civil Aeronautics Administration (CAA) for permission to transport cargo in passenger cabins after StarLux Airlines Co (星宇航空) last month became the first among the nation’s airlines to offer cargo-only flights using the normal cargo holds of its three Airbus SE A321neo passenger jets. “We are considering whether to increase our capacity by putting cargo on passenger seats,” Starlux spokesman Nieh Kuo-wei (聶國維) told the Taipei Times by telephone. “The advantage is that we can improve revenue,
GLOBAL CUTS: CEO Warren East said the firm’s focus was on strengthening financial resilience, so it would likely reduce salary costs by at least 10% this year Rolls-Royce Holdings PLC is scrapping its targets and final dividend to shore up its finances as the British aero-engine maker’s customers around the world ground planes due to the COVID-19 pandemic. Rolls-Royce, one of Britain’s most historic industrial names, which before the pandemic struck was trying to emerge from a multiyear turnaround plan, has suspended its dividend for the first time since 1987. The company’s engines power Airbus SE and Boeing Co’s widebody jets, but more than 60 percent of that fleet is now grounded, according to aviation data provider Cirium. Rolls-Royce is paid by airlines based on how many hours they fly. Over
PAINFUL CONTRACTION: Passenger loads in February on flights between Taiwan and China, Hong Kong and Macau fell by more than 90 percent compared with December Even with more than NT$450 billion (US$14.85 billion) in financial aid from the Executive Yuan’s expanded relief package, local tourism-related businesses are unlikely to rebound from the COVID-19 pandemic any time soon, a central bank report released last month said. The NT$1.05 trillion relief package includes NT$472 billion in financial assistance for tourism and transportation sectors, such as airlines, hotels, travel agencies, taxis and tour buses. However, a March 20 central bank report said that the effects of the COVID-19 pandemic on global and domestic economies are far greater than that of the 2002-2003 SARS epidemic, despite any benefits from delayed purchases
Taiwan’s GDP growth would slow to 0.2 percent this year as the COVID-19 pandemic would hurt the economy more severely than the government’s expanded relief measures could cover, Moody’s Investors Service said yesterday. Moody’s said that the pandemic’s effect on the economy has escalated from a temporary supply-side disruption of cross-strait trade to a global economic downturn. “The outbreak has evolved into a serious demand shock to Taiwan’s economy externally and domestically as the health crisis has swept the globe,” it said in a report. Taiwan is highly exposed to a global downturn because of its reliance on trade and cyclical industries. Export