European stocks fell for a third week as record short-term borrowing costs and shrinking orders to US factories deepened concern that a seizure in credit markets is pushing the global economy closer to a recession.
Bayerische Motoren Werke AG (BMW) slid 8.3 percent and Renault SA fell 14 percent as the carmakers forecast a prolonged sales slump and reports on factory orders and US manufacturing trailed estimates. BHP Billiton Ltd lost 13 percent after the Reuters/Jefferies CRB Index of raw materials posted the steepest drop since at least 1956. The rate banks charge each other for three-month loans surged after five of the region’s lenders including Dexia SA were forced into government-backed bailouts.
“The credit markets are basically shot,” Marino Valensise, who helps oversee about US$44.6 billion as chief investment officer at Baring Asset Management Ltd in London, said in an interview on Bloomberg Television.
Banks “are retaining cash and not lending. This is very dangerous for the corporate world,” Valensise said.
Europe’s Dow Jones STOXX 600 Index dropped 1.7 percent this week to 261.43, bringing its three-week tumble to 6.8 percent. It closed at the lowest since January 2005 on Monday, then recouped some of losses as banks rallied on speculation US lawmakers will pass a US$700 billion financial-market rescue package. US President George W. Bush signed the package on Friday after it was passed by Congress.
Allied Irish Banks PLC and Bank of Ireland PLC jumped more than 18 percent after the Irish parliament approved a 400 billion euro (US$550 billion) plan to protect the deposits and borrowings of six local banks.
The STOXX 600 has tumbled 28 percent this year, leaving the pan-European equity benchmark valued at 11 times its companies’ reported earnings, near the lowest since 2002.
National benchmark indexes retreated in 15 of the 18 western European markets this week. France’s CAC 40 lost 2 percent. The UK’s FTSE 100 dropped 2.1 percent, while Germany’s DAX retreated 4.4 percent.
The pound dropped the most versus the dollar since 1992 this week after speculation increased that the Bank of England will cut interest rates and the government seized Bradford & Bingley PLC, the UK’s biggest lender to landlords.
Auto markets won’t recover until at least the middle of next year, BMW chief executive officer Norbert Reithofer said on Oct. 2 at the Paris Motor Show. The world’s largest luxury-car maker may deepen production cuts if people continue to delay purchases.
Renault boss Carlos Ghosn predicted the slowdown may last two years.
Orders to US factories decreased by 4 percent, more than forecast and following a revised 0.7 percent increase in July that was smaller than previously estimated. The Institute of Supply Management’s factory index declined to 43.5, the lowest level since October 2001. A reading of 50 is the dividing line between expansion and contraction.
RESILIENCE: Deepening bilateral cooperation would extend the peace sustained over the 45 years since the Taiwan Relations Act, Greene said Taiwan-US relations are built on deep economic ties and shared values, American Institute in Taiwan (AIT) Director Raymond Greene said yesterday, adding that strengthening supply chain security in critical industries, enhancing societal resilience through cooperation and deepening partnerships are key to ensuring peace and stability for Taiwan in the years ahead. Greene made the remarks at the National Security Youth Forum, organized by National Taiwan University’s National Security and Strategy Studies Institution in Taipei. In his address in Mandarin Chinese, Greene said the Taiwan-US relationship is built on deep economic ties and shared interests, and grows stronger through the enduring friendship between
GAINING STEAM: The scheme initially failed to gather much attention, with only 188 cards issued in its first year, but gained popularity amid the COVID-19 pandemic Applications for the Employment Gold Card have increased in the past few years, with the card having been issued to a total of 13,191 people from 101 countries since its introduction in 2018, the National Development Council (NDC) said yesterday. Those who have received the card have included celebrities, such as former NBA star Dwight Howard and Australian-South Korean cheerleader Dahye Lee, the NDC said. The four-in-one Employment Gold Card combines a work permit, resident visa, Alien Resident Certificate (ARC) and re-entry permit. It was first introduced in February 2018 through the Act Governing Recruitment and Employment of Foreign Professionals (外國專業人才延攬及雇用法),
The Ministry of Transportation and Communications yesterday said that it would redesign the written portion of the driver’s license exam to make it more rigorous. “We hope that the exam can assess drivers’ understanding of traffic rules, particularly those who take the driver’s license test for the first time. In the past, drivers only needed to cram a book of test questions to pass the written exam,” Minister of Transportation and Communications Chen Shih-kai (陳世凱) told a news conference at the Taoyuan Motor Vehicle Office. “In the future, they would not be able to pass the test unless they study traffic regulations
‘COMING MENACINGLY’: The CDC advised wearing a mask when visiting hospitals or long-term care centers, on public transportation and in crowded indoor venues Hospital visits for COVID-19 last week increased by 113 percent to 41,402, the Centers for Disease Control (CDC) said yesterday, as it encouraged people to wear a mask in three public settings to prevent infection. CDC Epidemic Intelligence Center Deputy Director Lee Chia-lin (李佳琳) said weekly hospital visits for COVID-19 have been increasing for seven consecutive weeks, and 102 severe COVID-19 cases and 19 deaths were confirmed last week, both the highest weekly numbers this year. CDC physician Lee Tsung-han (李宗翰) said the youngest person hospitalized due to the disease this year was reported last week, a one-month-old baby, who does not
RSS