European stocks dropped for a fourth straight week, the longest stretch of losses since March, as oil retreated and concern mounted that earnings reports will show the economic slump is far from over.
Royal Dutch Shell PLC, BP PLC and Total SA slid more than 3 percent as crude headed for the biggest weekly drop since January. Aviva PLC led insurers lower on speculation it will cut its dividend.
Renault SA, France’s second-largest automaker, sank 11 percent as chief executive officer Carlos Ghosn said the expiration of state-backed sales incentives will offset any improvement in demand next year.
The Dow Jones STOXX 600 Index declined 3.4 percent in the past week to 197.25, the lowest since April. The measure has slumped 8.2 percent since June 11 on speculation share prices have outpaced the outlook for economic growth after a three-month rally pushed valuations to 25.4 times earnings, the highest level since 2004.
“We are still in a consolidation phase after the gains we saw in March and April,” said Daniel Knuchel, who oversees about US$3 billion as chief investment officer at AAM Privatbank AG in Zurich. “The risk appetite has clearly retreated since then and sentiment is less positive. Markets are very news driven and investors are waiting for the earnings season.”
The IMF forecast the global economy will shrink 1.4 percent this year before expanding 2.5 percent next year. In April, the Washington-based lender had predicted a 1.3 percent contraction this year, followed by 1.9 percent growth next year.
National benchmark indexes fell in all 18 western European markets. The UK’s FTSE 100 slipped 2.6 percent and France’s CAC 40 retreated 4.4 percent. Germany’s DAX dropped 2.8 percent as Porsche SE declined.
Shell, Europe’s biggest oil company, decreased 3.8 percent in London. BP and Total, the second and third-largest, slid 3.7 percent and 4.6 percent respectively.
Aviva, the UK’s largest insurer, tumbled 19 percent, dragging a gauge of insurers 6.7 percent lower for the biggest decline among 19 industry groups in the STOXX 600.
“We estimate that Aviva cannot rule out reducing its dividend distribution by 20 percent at least this year,” CA Cheuvreux analyst Jean D’Herbecourt in Paris wrote in a report on Tuesday, reducing his recommendation on the stock to “underperform” from “outperform.”
Bloomberg’s analysis and research showed on Friday that the insurer may reduce its interim dividend next month to £0.0875 a share from £0.1309 last year.
Infineon Technologies AG surged 12 percent. Europe’s second-largest chipmaker agreed to sell its Wireline Communications business to an affiliate of Golden Gate Capital Corp for 250 million euros (US$346 million).
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