European stocks declined on Friday, paring their biggest weekly gain in six months, after US Federal Reserve Chair Janet Yellen underscored the persistence of labor-market slack in the US economy and as investors watched rising tensions in Ukraine.
Piraeus Bank SA and Banca Monte dei Paschi di Siena SpA gained at least 2.8 percent as a gauge of lenders advanced for a second day. Essentra PLC climbed 3.1 percent after JPMorgan Chase & Co raised its rating on the UK maker of items from toothpaste tubes to packaging tape.
The STOXX Europe 600 Index slipped 0.2 percent to 336.75 at the close of trading in London. The gauge earlier dropped as much as 0.7 percent after Russian aid trucks entered Ukraine without consent from Kiev.
The STOXX 600 rallied 2.1 percent this week as investors bet that industrial slowdown in the euro area would increase pressure on the European Central Bank to introduce asset purchases known as quantitative easing.
“We’re so used to Yellen being an arch dove, anything less than that is treated with some disappointment,” Michael Ingram, a market strategist at BGC Brokers LP in London, said by telephone. “But it does look like the market is edgy particularly in light of the Fed minutes we saw earlier in the week. The center of gravity in terms of a rate decision does seem to be moving toward an earlier rise,” he said.
In remarks that appeared to be in line with the minutes of the Fed’s latest policy meeting, Yellen said on Friday that slack remains in the US labor market even after gains made during the five years of economic recovery. Stocks briefly pared losses after her comments.
“The economy has made considerable progress in recovering from the largest and most sustained loss of employment” since the Great Depression, Yellen said in a speech at the Kansas City Fed’s annual economics conference in Jackson Hole, Wyoming.
Even so, she underscored the Federal Open Market Committee statement last month that “underutilization of labor resources still remains significant.”
Yellen also said the Fed’s assessment of employment slack has become challenging and there is no simple recipe for appropriate policy.
National benchmark indices fell in all the western European markets except Greece on Friday. The UK’s FTSE 100 Index slipped less than 0.1 percent, France’s CAC 40 retreated 0.9 percent and Germany’s DAX lost 0.7 percent. The ASE Index in Athens climbed 1.1 percent, taking its rally since a 10-month low on Aug. 8 to 10 percent.
UNDERESTIMATED: The agency said that as its previous forecast was guided by the SARS crisis, it did not adequately account for disruptions caused by the pandemic The nation’s economy might grow just 1.67 percent this year squarely on the back of government expenditure and private investment, as exports and consumer spending have stalled, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The forecast is a sizeable retreat from an estimate of 2.37 percent growth made in February before the COVID-19 outbreaks became a pandemic. “The previous forecast was guided by the SARS crisis in 2003 and therefore underestimated the ongoing pandemic, which is hitting economic activity hard at home and abroad,” DGBAS Minister Chu Tzer-ming (朱澤民) told a media briefing in Taipei. The agency now expects exports
‘SUSCEPTIBLE’: The timing of an intervention, rather than the amount of money injected to the market, is more important, the deputy minister of finance said The National Stabilization Fund would remain on stand-by to shore up the local bourse until the COVID-19 pandemic has subsided worldwide, Deputy Minister of Finance Frank Juan (阮清華) said yesterday. Although Taiwan has stopped the virus’ spread, the fund would remain active in light of fragile financial markets across the world, said Juan, the state-run fund’s executive secretary. The government activated the fund on March 20 after the TAIEX slumped from 12,000 points to 8,600 in a short period amid a panic selloff. The main board has since recovered, yesterday closing at 10,997.21 points on turnover of NT$180.767 billion (US$6.03 billion), Taiwan
‘EXTERNAL VULNERABILITY’: The city-state’s economy in the first quarter shrank 4.7 percent quarterly due to worsening external demand outlook amid the pandemic Singapore’s embattled economy could shrink by as much as 7 percent this year, which would be the worst reading since independence in 1965, with the government saying yesterday that the COVID-19 pandemic had throttled the key export sector. The Singaporean Ministry of Trade and Industry’s forecast — which was a downgrade from the 4 percent contraction predicted in March — came as official data showed that the economy shrank 0.7 percent year-on-year in the first three months of the year, while it contracted 4.7 percent from the previous quarter. The ministry said the new estimate was made “in view of the deterioration
South Korean prosecutors yesterday summoned Samsung Electronics Co vice chairman Jay Y. Lee for questioning in an investigation into alleged accounting fraud and a controversial 2015 merger of two Samsung affiliates, dealing another legal blow to the country’s largest corporation. While expected, the decision marked a deepening of a long-running probe into the billionaire scion and his shipbuilding-to-smartphones Samsung Group conglomerate. The company’s de facto leader was called into Seoul Central District Prosecutors Office at 8am in relation to allegations over illegal acts in succession plans, the Yonhap News Agency reported. Lee has been at the center of a years-long scandal