European stocks snapped two straight weeks of gains on speculation a rally that drove valuations on the Dow Jones STOXX 600 Index to the highest in six years has outpaced the prospects for economic and earnings growth.
A.P. Moeller-Maersk AS slumped 9.8 percent after the owner of the world’s largest container shipper held its biggest share sale since World War II to help finance acquisitions in the oil and terminals businesses. Eiffage SA led a slump among construction firms as reports on US unemployment and factory orders spurred concern that the economy is struggling to recover.
Europe’s STOXX 600 index slid 1.5 percent to 233.85 in the past week. The regional benchmark gauge has still soared 48 percent since March 9 as the French and German economies unexpectedly emerged from recession and profits at companies from Roche Holding AG to L’Oreal SA topped analysts’ estimates. The rally pushed the price-to-earnings ratio on the index to 44.8, near the highest level since September 2003, according to data compiled by Bloomberg.
Equity strategists at Goldman Sachs Group Inc and UBS AG raised their year-end forecasts for European equities, citing prospects for an economic recovery and a revival in earnings growth. Goldman Sachs lifted its estimate for the STOXX 600 index to 260 from 235, while UBS’s Nick Nelson increased his target for the FTSEurofirst 300 Index to 1,100 from 1,000.
“While we agree that the market tends to make its strongest returns while the economy is still contracting, albeit at a slowing rate, it tends to make further gains as the economy begins to expand,” a team of Goldman Sachs strategists led by Peter Oppenheimer in London wrote in a report dated Sept 3.
The US Federal Reserve expressed “considerable uncertainty” about the strength of the recovery in the world’s largest economy, minutes of its August meeting showed on Wednesday.
EU Monetary Affairs Commissioner Joaquin Almunia said he “cannot be optimistic” about unemployment in the region, which is at a 10-year high.
“The figures are worrying,” Almunia told reporters on Wednesday in Brussels after a meeting of European finance ministers. “I cannot be optimistic for the next months because we know from our experience that the negative reaction of the labor market to the economic contraction has a certain lag.”
The euro-area unemployment rate increased to 9.5 percent in July, the highest since June 1999, the EU statistics office in Luxembourg said on Monday. The European Commission forecasts the jobless rate will rise to 11.5 percent next year.
Authorities have detained three former Taiwan Semiconductor Manufacturing Co (TMSC, 台積電) employees on suspicion of compromising classified technology used in making 2-nanometer chips, the Taiwan High Prosecutors’ Office said yesterday. Prosecutors are holding a former TSMC engineer surnamed Chen (陳) and two recently sacked TSMC engineers, including one person surnamed Wu (吳) in detention with restricted communication, following an investigation launched on July 25, a statement said. The announcement came a day after Nikkei Asia reported on the technology theft in an exclusive story, saying TSMC had fired two workers for contravening data rules on advanced chipmaking technology. Two-nanometer wafers are the most
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
A bipartisan group of US representatives have introduced a draft US-Taiwan Defense Innovation Partnership bill, aimed at accelerating defense technology collaboration between Taiwan and the US in response to ongoing aggression by the Chinese Communist Party (CCP). The bill was introduced by US representatives Zach Nunn and Jill Tokuda, with US House Select Committee on the Chinese Communist Party Chairman John Moolenaar and US Representative Ashley Hinson joining as original cosponsors, a news release issued by Tokuda’s office on Thursday said. The draft bill “directs the US Department of Defense to work directly with Taiwan’s Ministry of National Defense through their respective
Tsunami waves were possible in three areas of Kamchatka in Russia’s Far East, the Russian Ministry for Emergency Services said yesterday after a magnitude 7.0 earthquake hit the nearby Kuril Islands. “The expected wave heights are low, but you must still move away from the shore,” the ministry said on the Telegram messaging app, after the latest seismic activity in the area. However, the Pacific Tsunami Warning System in Hawaii said there was no tsunami warning after the quake. The Russian tsunami alert was later canceled. Overnight, the Krasheninnikov volcano in Kamchatka erupted for the first time in 600 years, Russia’s RIA
RSS