European stocks snapped a two-week advance as concern mounted that an economic slowdown and record oil prices will curb earnings growth.
Deutsche Boerse AG, the region’s biggest exchange by market value, and HBOS Plc, the UK’s largest mortgage lender, led financial shares lower. DSG International Plc, the biggest UK. consumer electronics retailer, paced a decline in consumer stocks after cutting its earnings forecast for the second time this year.
The Dow Jones STOXX 600 Index dropped 2.6 percent to 310.74. The benchmark has fallen 22 percent from last year’s high on June 1 on speculation US$245 billion in losses and writedowns related to the collapse of US subprime mortgages will hurt profits at financial firms and drag down global economic growth.
“Recent investor psychology was that the worst of the financial liquidity crisis is over, but in reality, it is recessionary fears that could drive this market to new lows,” said Jason McNab, who helps manage about US$1.7 billion at Duet Asset Management Ltd in London.
Analysts this week forecast for the first time that European companies’ earnings will shrink this year. They estimate a 0.1 percent decline, compared with a growth projection of 11 percent at the end of last year, Bloomberg data show.
Crude oil futures in New York climbed to a record high of US$112.21 a barrel on Wednesday after the US Energy Department reported an unexpected decline in US inventories.
National benchmarks decreased in 16 of the 18 western European markets. Germany’s DAX Index slipped 2.4 percent, while France’s CAC 40 lost 2.1 percent. The UK.’s FTSE 100 dropped 0.9 percent. The STOXX 50 retreated 2.5 percent, as did the Eur STOXX 50, a measure for the Europe region.
Indexes extended declines on Friday after General Electric Co, the world’s third-biggest company by market value, reported profit that fell short of analysts’ estimates and its own forecast. The company also reduced its full-year guidance.
“When a bellwether like GE misses the earnings forecast, it is like an exclamation mark,” Carsten Klude, head of investment strategy at M.M. Warburg & Co in Hamburg, said in a Bloomberg Television interview. “We haven’t seen the end of the downward earnings revisions yet.”
Deutsche Boerse retreated 8.3 percent. The operator of the Frankfurt bourse said on Tuesday that its Clearstream settlement division processed fewer transactions last month.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique