European stocks completed the fourth weekly decline on mounting concern that record oil prices, higher borrowing costs and slowing economic growth will erode earnings.
Daimler AG, the world’s second-largest maker of luxury cars, and Ryanair Holdings Plc paced a retreat in companies sensitive to fuel costs as crude rose above US$142 for the first time. Carrefour SA, Europe’s biggest retailer, led retail stocks lower after scaling back forecasts for operating profit and sales.
“High energy costs and oil prices are hampering economic growth,” Wolfgang Matejka, who oversees about US$3 billion as chief investment officer at Vienna-based Meinl Bank AG, said in a Bloomberg Television Interview on Friday.
Europe’s Dow Jones STOXX 600 Index tumbled 2.6 percent to 287.34 this week.
The measure is poised for the worst first half since at least 1987 as record oil prices, inflation and credit-market losses approaching US$400 billion are weighing on shares.
Earnings for companies in the STOXX 600 are expected to drop 0.5 percent this year, compared with 11 percent growth forecast at the end of last year, according to data compiled by Bloomberg.
“Financial markets are doing badly and I believe it will be two to three years from now until this bear market is over,” Uto Baader, chairman of brokerage Baader Wertpapierhandelsbank AG in Unterschleissheim, Germany, said in a Bloomberg Television interview on Friday.
“The subprime crisis, narrowly speaking, is almost over. But the consequences for the real economy are just beginning to be felt,” Baader said.
Daimler dropped 10 percent and Ryanair, Europe’s biggest discount airline, retreated 11 percent.
Lehman Brothers Holdings Inc lowered its earnings estimate for the European car industry for this year by 6 percent and cut its share-price estimates for automakers including Daimler, citing “headwinds” from higher raw-material prices in a report.
Bayerische Motoren Werke AG, the world’s biggest luxury carmaker, declined 6.8 percent and Fiat SpA, Italy’s largest manufacturer, fell 11 percent.
Carmakers in the region face the risk of a 1970s-style oil-price shock, Credit Suisse Group AG wrote in a note June 23.
European retail sales plunged this month as soaring fuel and food prices hit consumers’ budgets, prompting stores to cut jobs and lose confidence about their prospects, the Bloomberg purchasing managers index showed.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source