European stocks declined for a sixth week to their lowest in three years as oil surged to a record, fueling inflation, while companies from banks to retailers said a slowdown in economic growth is hurting earnings.
Michelin & Cie, the world’s second-largest tiremaker, and Volkswagen AG, Europe’s biggest carmaker, slid. Carrefour SA, the region’s largest retailer, sank to its lowest in more than five years after saying sales growth slowed. Bank of Ireland PLC fell after saying the economy is “adversely impacting” profit. Wienerberger AG led construction stocks lower on earnings.
The Dow Jones STOXX 600 Index sank 3.3 percent this week to 270.36, for the longest weekly declining streak since January. The index is down 26 percent this year as a rout led by banks trimmed more than US$11 trillion from global equities.
“The market is very nervous,” said Edouard Carmignac, chief investment officer at Carmignac Gestion, which oversees US$24 billion in Paris. “We can’t see very clearly. The increase in raw materials prices is decreasing buying power and creating inflationary pressure.”
Record oil prices, accelerating inflation and more than US$400 billion in credit-related losses threaten to push the US into recession and stifle profit growth. Earnings for STOXX 600 companies are expected to drop 2.3 percent this year, according to data compiled by Bloomberg. That compares with an estimate for a 0.7 percent decrease a month ago.
“Investors are focusing on the return of worries about the financial industry,” said Alexandre Iatrides, a fund manager at Richelieu Finance in Paris, which oversees US$6.2 billion. “There’s still the specter of a crisis. That adds to concern about the economic slowdown and the rise in oil prices.”
National benchmark indexes retreated in all of the 18 western European markets. Germany’s DAX Index fell 1.9 percent this week. France’s CAC 40 lost 3.9 percent. The UK’s FTSE 100 slipped 2.8 percent, bringing its loss from last year’s high to 22 percent. The STOXX 50 retreated 2.9 percent, and the Euro STOXX 50, a measure for the euro region, slid 2.4 percent.
The Bank of England kept its key interest rate unchanged at 5 percent on July 10, in line with economists’ predictions, as policy makers weighed the threat of Britain’s first recession in a generation against the risk of accelerating inflation.
“We expect the markets to stay lower,” Rainer Gerdau, head of equity strategy at Saxo Bank A/S, said in a Bloomberg Television interview. “It is too early for a turn-around, the recession is yet to come.”
Crude oil rose to a record on concerns that Israel may be preparing to attack Iran, while a strike in Brazil and renewed militant activity in Nigeria threaten to cut supplies. The contract for August delivery reached an all-time high of US$147.27 a barrel on the New York Mercantile Exchange.
Michelin retreated 8.2 percent. Volkswagen lost 4 percent.
Air Berlin PLC sank 18 percent. Europe’s third-biggest low-cost airline pulled out of talks to buy German charter carrier Condor from Thomas Cook Group PLC after fuel costs surged.
Beijing’s continued provocations in the Taiwan Strait reveal its intention to unilaterally change the “status quo” in the area, the US Department of State said on Saturday, calling for a peaceful resolution to cross-strait issues. The Coast Guard Administration (CGA) reported that four China Coast Guard patrol vessels entered restricted and prohibited waters near Kinmen County on Friday and again on Saturday. A State Department spokesperson said that Washington was aware of the incidents, and urged all parties to exercise restraint and refrain from unilaterally changing the “status quo.” “Maintaining peace and stability across the Taiwan Strait is in line with our [the
EXTENDED RANGE: Hsiung Sheng missiles, 100 of which might be deployed by the end of the year, could reach Chinese command posts and airport runways, a source said A NT$16.9 billion (US$534.93 million) project to upgrade the military’s missile defense systems would be completed this year, allowing the deployment of at least 100 long-range Hsiung Sheng missiles and providing more deterrence against China, military sources said on Saturday. Hsiung Sheng missiles are an extended-range version of the Hsiung Feng IIE (HF-2E) surface-to-surface cruise missile, and are believed to have a range of up to 1,200km, which would allow them to hit targets well inside China. They went into mass production in 2022, the sources said. The project is part of a special budget for the Ministry of National Defense aimed at
READY TO WORK: Taiwan is eager to cooperate and is hopeful that like-minded states will continue to advocate for its inclusion in regional organizations, Lai said Maintaining the “status quo” in the Taiwan Strait, and peace and stability in the Indo-Pacific region must be a top priority, president-elect William Lai (賴清德) said yesterday after meeting with a delegation of US academics. Leaders of the G7, US President Joe Biden and other international heads of state have voiced concerns about the situation in the Strait, as stability in the region is necessary for a safe, peaceful and prosperous world, Lai said. The vice president, who is to be inaugurated in May, welcomed the delegation and thanked them for their support for Taiwan and issues concerning the Strait. The international community
COOPERATION: Two crewmembers from a Chinese fishing boat that sank off Kinmen were rescued, two were found dead and another two were still missing at press time The Coast Guard Administration (CGA) was yesterday working with Chinese rescuers to find two missing crewmembers from a Chinese fishing boat that sank southwest of Kinmen County yesterday, killing two crew. The joint operation managed to rescue two of the boat’s six crewmembers, but two were already dead when they were pulled from the water, the agency said in a statement. Rescuers are still searching for two others from the Min Long Yu 61222, a boat registered in China’s Fujian Province that capsized and sank 1.03 nautical miles (1.9km) southwest of Dongding Island (東碇), it added. CGA Director-General Chou Mei-wu (周美伍) told a