European stocks fell for the first week in more than a month as investors speculated share prices have outpaced the outlook for economic growth and companies from Aegon NV to Nestle SA posted lower earnings.
Aegon, the Dutch owner of US insurer Transamerica Corp, slumped 12 percent, while Nestle, the world’s biggest food company, sank 4.4 percent. Volkswagen AG plummeted 24 percent after saying it will pay about 3.3 billion euros (US$4.7 billion) for a stake in Porsche SE’s automotive unit.
Europe’s Dow Jones STOXX 600 Index lost 0.8 percent to 228.77 in the past week, snapping four weeks of gains. A 45 percent rebound since March 9 has left the regional measure valued at 39.9 times the profits of its companies, the most expensive since September 2003, weekly data compiled by Bloomberg show.
“In the short term you have to be cautious, equities are no longer very cheap,” said Manfred Hofer, head of equity analysis at LGT Capital Management in Pfaeffikon, Switzerland, which oversees about US$73 billion. “Companies have been able to post profits because of cost cutting. We now need to see economic data confirm an upturn, then it’s possible that profits and revenues will increase.”
The euro region’s economy contracted 0.1 percent in the second quarter as Germany and France unexpectedly returned to growth, suggesting Europe’s worst recession since World War II is coming to an end. Economists had estimated gross domestic product declined 0.5 percent in the three months through June, the median of 32 forecasts in a Bloomberg survey showed.
Bank of England Governor Mervyn King said that while recent economic reports are “encouraging,” growth won’t resume on an annual basis until 2010 while banks restrict access to credit.
National benchmark indexes declined in 10 of the 18 western European markets. The UK’s FTSE 100 lost 0.4 percent, and France’s CAC 40 decreased 0.7 percent. Germany’s DAX dropped 2.8 percent as Daimler AG slid.
Aegon tumbled 12 percent. The Dutch insurer posted a fourth straight quarterly loss on writedowns and the sale of a unit and said it will sell 1 billion euros of shares to help repay state aid. The second-quarter net loss was 161 million euros, wider than analysts’ estimates, and compared with a profit of 276 million euros a year earlier.
Beijing’s continued provocations in the Taiwan Strait reveal its intention to unilaterally change the “status quo” in the area, the US Department of State said on Saturday, calling for a peaceful resolution to cross-strait issues. The Coast Guard Administration (CGA) reported that four China Coast Guard patrol vessels entered restricted and prohibited waters near Kinmen County on Friday and again on Saturday. A State Department spokesperson said that Washington was aware of the incidents, and urged all parties to exercise restraint and refrain from unilaterally changing the “status quo.” “Maintaining peace and stability across the Taiwan Strait is in line with our [the
EXTENDED RANGE: Hsiung Sheng missiles, 100 of which might be deployed by the end of the year, could reach Chinese command posts and airport runways, a source said A NT$16.9 billion (US$534.93 million) project to upgrade the military’s missile defense systems would be completed this year, allowing the deployment of at least 100 long-range Hsiung Sheng missiles and providing more deterrence against China, military sources said on Saturday. Hsiung Sheng missiles are an extended-range version of the Hsiung Feng IIE (HF-2E) surface-to-surface cruise missile, and are believed to have a range of up to 1,200km, which would allow them to hit targets well inside China. They went into mass production in 2022, the sources said. The project is part of a special budget for the Ministry of National Defense aimed at
READY TO WORK: Taiwan is eager to cooperate and is hopeful that like-minded states will continue to advocate for its inclusion in regional organizations, Lai said Maintaining the “status quo” in the Taiwan Strait, and peace and stability in the Indo-Pacific region must be a top priority, president-elect William Lai (賴清德) said yesterday after meeting with a delegation of US academics. Leaders of the G7, US President Joe Biden and other international heads of state have voiced concerns about the situation in the Strait, as stability in the region is necessary for a safe, peaceful and prosperous world, Lai said. The vice president, who is to be inaugurated in May, welcomed the delegation and thanked them for their support for Taiwan and issues concerning the Strait. The international community
COOPERATION: Two crewmembers from a Chinese fishing boat that sank off Kinmen were rescued, two were found dead and another two were still missing at press time The Coast Guard Administration (CGA) was yesterday working with Chinese rescuers to find two missing crewmembers from a Chinese fishing boat that sank southwest of Kinmen County yesterday, killing two crew. The joint operation managed to rescue two of the boat’s six crewmembers, but two were already dead when they were pulled from the water, the agency said in a statement. Rescuers are still searching for two others from the Min Long Yu 61222, a boat registered in China’s Fujian Province that capsized and sank 1.03 nautical miles (1.9km) southwest of Dongding Island (東碇), it added. CGA Director-General Chou Mei-wu (周美伍) told a