Europe’s Dow Jones STOXX 600 Index resumed gains this week, erasing its loss for the year and posting a record monthly rally amid better-than-expected earnings and speculation that the global recession is easing.
BASF SE, the world’s biggest chemical company, Sanofi-Aventis SA and Siemens AG rose as their profits topped forecasts. Banks surged to the highest since December on expectations the industry is recovering from the credit crisis.
The STOXX 600 added 2.3 percent to 200.23 in the four days this week, its seventh advance in eight weeks. Europe’s regional benchmark climbed 13 percent last month, the biggest monthly gain since records began in 1987. The measure, which is now up 0.9 percent for the year, did not update on Friday, as all European markets except the UK and Denmark were closed.
Banks led the April advance as Credit Suisse Group AG beat analysts’ profit forecasts and Barclays PLC indicated its first-quarter performance was “well ahead” of last year. Confidence in the outlook for the European economy rose, a report showed this week, while investors also speculated that government plans to purchase illiquid assets from banks will pull the global economy out of its recession.
“We have significant numbers supporting our general expectation that the economy will turn around in late 2009,” said Henrik Drusebjerg, a senior strategist at Nordea in Copenhagen. “If that is the case, equity markets will turn around six to nine months before.”
The UK’s FTSE 100 rallied 2.1 percent in the week, Germany’s DAX rose 2 percent and France’s CAC 40 added 1.8 percent. Sweden’s OMX Stockholm 30 Index lost 2 percent as profit at Ericsson AB fell for a seventh straight quarter.
BASF surged 5.3 percent after it reported first-quarter net income of 375 million euros (US$498.8 million), beating the 124 million euro average estimate of analysts.
Sanofi jumped 7.5 percent. France’s largest drugmaker said April 29 that first-quarter adjusted net income climbed 16 percent to 2.18 billion euros, helped by increased demand for its Lantus medicine for diabetics.
That beat the 1.98 billion-euro median estimate of 10 analysts surveyed by Bloomberg.
Siemens, Europe’s largest engineering company, advanced 3.5 percent. Operating profit at the company’s main industry, energy and health-care units, referred to as “sector profit,” climbed to 1.84 billion euros from 1.29 billion euros, the company said on Wednesday. Analysts in a Bloomberg survey predicted 1.65 billion euros.
More than half of the 132 companies in the STOXX 600 that reported earnings results from April 7 to Thursday exceeded analysts’ predictions, data compiled by Bloomberg show. That trails the 70 percent of companies in the S&P 500 that beat estimates.
The STOXX 600 Banks Index climbed 5 percent to the highest since Dec. 10. The measure, the heaviest among 19 industries in the broader STOXX 600, tumbled 83 percent from April 2007 to this March as global losses tied to subprime mortgages at financial firms climbed toward more than US$1.3 trillion.
WAITING GAME: The US has so far only offered a ‘best rate tariff,’ which officials assume is about 15 percent, the same as Japan, a person familiar with the matter said Taiwan and the US have completed “technical consultations” regarding tariffs and a finalized rate is expected to be released soon, Executive Yuan spokeswoman Michelle Lee (李慧芝) told a news conference yesterday, as a 90-day pause on US President Donald Trump’s “reciprocal” tariffs is set to expire today. The two countries have reached a “certain degree of consensus” on issues such as tariffs, nontariff trade barriers, trade facilitation, supply chain resilience and economic security, Lee said. They also discussed opportunities for cooperation, investment and procurement, she said. A joint statement is still being negotiated and would be released once the US government has made
NEW GEAR: On top of the new Tien Kung IV air defense missiles, the military is expected to place orders for a new combat vehicle next year for delivery in 2028 Mass production of Tien Kung IV (Sky Bow IV) missiles is expected to start next year, with plans to order 122 pods, the Ministry of National Defense’s (MND) latest list of regulated military material showed. The document said that the armed forces would obtain 46 pods of the air defense missiles next year and 76 pods the year after that. The Tien Kung IV is designed to intercept cruise missiles and ballistic missiles to an altitude of 70km, compared with the 60km maximum altitude achieved by the Missile Segment Enhancement variant of PAC-3 systems. A defense source said yesterday that the number of
Taiwanese exports to the US are to be subject to a 20 percent tariff starting on Thursday next week, according to an executive order signed by US President Donald Trump yesterday. The 20 percent levy was the same as the tariffs imposed on Vietnam, Sri Lanka and Bangladesh by Trump. It was higher than the tariffs imposed on Japan, South Korea and the EU (15 percent), as well as those on the Philippines (19 percent). A Taiwan official with knowledge of the matter said it is a "phased" tariff rate, and negotiations would continue. "Once negotiations conclude, Taiwan will obtain a better
FLOOD RECOVERY: “Post-Typhoon Danas reconstruction special act” is expected to be approved on Thursday, the premier said, adding the flood control in affected areas would be prioritized About 200cm of rainfall fell in parts of southern Taiwan from Monday last week to 9am yesterday, the Central Weather Administration (CWA) said. Kaohsiung’s Taoyuan District (桃源) saw total rainfall of 2,205mm, while Pingtung County’s Sandimen Township (三地門) had 2,060.5mm and Tainan’s Nanhua District (南化) 1,833mm, according to CWA data. Meanwhile, Alishan (阿里山) in Chiayi County saw 1,688mm of accumulated rain and Yunlin County’s Caoling (草嶺) had 1,025mm. The Pingtung County Government said that 831 local residents have been pre-emptively evacuated from mountainous areas. A total of 576 are staying with relatives in low-lying areas, while the other 255 are in shelters. CWA forecaster
RSS