European stocks posted the sixth consecutive weekly advance, the longest stretch of gains since January 2006, as speculation grew that the worst of the financial crisis has passed.
The Dow Jones STOXX 600 Index rose 4.7 percent to 196.96, the highest level since Feb. 9. The measure has rebounded 25 percent from a 12-year low on March 9 as lenders signaled they made money at the beginning of this year and the US government unveiled plans to purchase as much as US$1 trillion in toxic assets from financial firms.
“The recent positive earnings from major banks like Goldman Sachs, JPMorgan and Citigroup has improved investor optimism that the worst of the banking crisis may be over,” said Joshua Raymond, a London-based market strategist at City Index. “Investors are now looking toward the banks to restore confidence and the results witnessed thus far have gone some way to doing this.”
The VSTOXX Index, which measures the cost of using options as insurance against declines in the Dow Jones Euro STOXX 50 Index, slid to 36.70 this week, the lowest level since Sept. 25. The index reached a record 87.51 on Oct. 16 following the collapse of Lehman Brothers Holdings Inc.
National benchmark indexes increased in all 18 western European markets. Germany’s DAX climbed 4.1 percent as Deutsche Bank AG rallied, while the UK’s FTSE 100 rose 2.7 percent. France’s CAC 40 added 4 percent.
Financial companies are expected to drive an earnings recovery in the US and Europe. While analysts predict overall profits in the Standard & Poor’s 500 Index will drop 15 percent this year before rebounding 24 percent next year, earnings in the STOXX 600 are estimated to grow 20 percent this year and 15 percent next year, according to Bloomberg data.
UBS added 22 percent, even as Switzerland’s largest bank said it plans to cut another 7,500 jobs amid mounting losses and customer defections. BNP, France’s biggest, climbed 14 percent and Germany’s Deutsche Bank rose 13 percent. A measure of bank shares on the STOXX 600 rallied 10 percent, the best performance among 19 industry groups.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
STATE OF THE NATION: The legislature should invite the president to deliver an address every year, the TPP said, adding that Lai should also have to answer legislators’ questions The Chinese Nationalist Party (KMT) yesterday proposed inviting president-elect William Lai (賴清德) to make a historic first state of the nation address at the legislature following his inauguration on May 20. Lai is expected to face many domestic and international challenges, and should clarify his intended policies with the public’s representatives, KMT caucus secretary-general Hung Meng-kai (洪孟楷) said when making the proposal at a meeting of the legislature’s Procedure Committee. The committee voted to add the item to the agenda for Friday, along with another similar proposal put forward by the Taiwan People’s Party (TPP). The invitation is in line with Article 15-2