European stocks rose for the first time in three weeks after a report showed the US economy expanded more than previously estimated last quarter and concerns eased that banks need more capital.
CRH PLC, the world’s second-biggest maker and distributor of building materials, paced an advance among companies that depend on sales in North America. Credit Agricole SA led banks higher as it said a key measure of financial strength held steady. Royal BAM Groep NV, the largest Dutch construction company, rallied 13 percent after posting second-quarter earnings that beat analysts’ estimates and raising its profit forecast.
Europe’s Dow Jones STOXX 600 Index added 1.5 percent this week to 288.18, bringing the gain for this month to 1.6 percent. The measure is still down 21 percent this year as asset writedowns and credit losses at banks topped US$500 billion worldwide, threatening to push the US economy into recession.
“Investors seem to be relieved that the worst-case scenario for the US economy so far hasn’t come true,” said Carsten Klude, an investment strategist at M.M. Warburg & Co in Hamburg, which has the equivalent of US$25 billion. “The GDP data triggered a stocks rally.”
National benchmark indexes advanced in all 18 western European markets this week, except Greece and Iceland. France’s CAC 40 gained 1.9 percent. The UK’s FTSE 100 added 2.4 percent, while Germany’s DAX climbed 1.3 percent.
The US economy grew at a 3.3 percent annual rate in the second quarter, surpassing last month’s estimate of 1.9 percent, the US Commerce Department said on Thursday.
Record exports and a smaller decline in inventories helped boost growth. Economists had predicted a 2.7 percent rate, according to the median estimate in a Bloomberg News survey.
“The US data supported the market, implying that the world’s largest economy may not fall into as deep a recession as some investors feared,” Thomas Koerfgen, a money manager at SEB Asset Management in Frankfurt, said in a Bloomberg Television interview.
Gains in the STOXX 600 were limited by carmakers including Renault SA and Bayerische Motoren Werke AG as crude climbed above US$117 a barrel. Oil producers evacuated rigs before the arrival of Gustav, forecast to be the largest hurricane in the Gulf of Mexico since Katrina.
CRH increased 4.6 percent. The company gets about 49 percent of its revenue in the Americas, Bloomberg data show.
The STOXX 600 Banks Index is down 30 percent this year, the worst performance among 18 industry groups, as financial firms worldwide raised more than US$353 billion to replenish capital. Analysts estimate banks’ earnings will decline 24 percent this year, according to data compiled by Bloomberg News.
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
REGIONAL STABILITY: Taipei thanked the Biden administration for authorizing its 16th sale of military goods and services to uphold Taiwan’s defense and safety The US Department of State has approved the sale of US$228 million of military goods and services to Taiwan, the US Department of Defense said on Monday. The state department “made a determination approving a possible Foreign Military Sale” to the Taipei Economic and Cultural Representative Office in the US for “return, repair and reshipment of spare parts and related equipment,” the defense department’s Defense Security Cooperation Agency said in a news release. Taiwan had requested the purchase of items and services which include the “return, repair and reshipment of classified and unclassified spare parts for aircraft and related equipment; US Government
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from