European stocks capped the first weekly decline in more than a month as investors speculated share prices have outpaced the outlook for economic growth and corporate earnings.
Rio Tinto Group, the world’s third-largest mining company, and Royal Dutch Shell PLC, Europe’s biggest oil producer, fell with copper and crude prices. DSG International PLC, Europe’s second-largest electronics goods retailer, slid 15 percent after UK retail sales unexpectedly retreated. K+S AG sank 21 percent as the potash producer forecast a drop in sales and earnings.
The Dow Jones STOXX 600 Index lost 2.8 percent to 208.28 in the week, the biggest drop since the week ended on May 15. A three-month, 36 percent surge through the end of last week had left the measure trading at 25.4 times profit, the highest level since 2004, according to weekly data compiled by Bloomberg.
“It’s not surprising that we saw some profit taking after the tremendous rally,” said Gerold Kuehne, who manages about US$115 million at LLB Asset Management AG in Vaduz, Liechtenstein. “The economy determines the direction of the markets and we saw that if data is better than expected, like US leading indicators, it still has the potential to give the market a boost.”
European stocks pared the weekly loss after reports showed the US leading economic indicators index climbed for a second straight month last month and the number of Americans receiving unemployment benefits dropped for the first time since January.
Even so, US industrial production fell last month for the 16th time in the last 17 months, reflecting declines in consumer goods and business equipment that signals the manufacturing slump remains broad-based.
EU leaders spotted the first signs of a “sustainable economic recovery” and started planning to roll back budget deficits piled up to combat the financial crisis. The 27 government heads said the looming end of the slump means it is time to start hatching an “exit strategy.” They also agreed to overhaul financial regulation after banking supervision failed to contain the crisis.
National benchmark indexes fell in all 18 western European markets. The UK’s FTSE 100 dropped 2.2 percent as Lonmin PLC tumbled. France’s CAC 40 lost 3.2 percent as Michelin & Cie fell, while Germany’s DAX slid 4.5 percent.
A measure of basic-resources shares in the STOXX 600 retreated 9.5 percent, the second-biggest decline among 19 industry groups.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source
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