European stocks advanced for a second week, with the Dow Jones STOXX 600 Index extending a six-month rally, as economic reports spurred speculation that company earnings will improve amid a global recovery.
Allied Irish Banks PLC soared 28 percent after saying it will sell property loans to the country’s so-called bad bank and raise about 2 billion euros (US$2.9 billion) in capital. Danisco A/S jumped 19 percent as the Nordic region’s biggest food ingredient maker reported first-quarter earnings that topped estimates and raised its full-year forecasts.
The STOXX 600 added 1.3 percent to 244.92, as all 15 out of 19 industry groups advanced. A 55 percent rally since March 9 has pushed the regional gauge to an 11-month high as results at companies from Goldman Sachs Group Inc to Roche Holding AG surpassed projections and the German and French economies unexpectedly exited recessions.
“We have confidence in top-line growth coming through because we’ve seen the macroeconomic data tell us there is actually growth in these economies now,” said Nick Nelson, a European equity strategist at UBS AG in London. “Corporate profits are providing you with the reason to get more constructive on stocks.”
Earnings for companies in the STOXX 600 are forecast to rise 4.3 percent this year and 29 percent next year, weekly data compiled by Bloomberg showed.
Reports this week showed the number of Americans filing first-time claims for jobless benefits fell unexpectedly last week, while builders in the US broke ground last month on the most houses in nine months and manufacturing in the Philadelphia region expanded this month for a second month.
US Fed Chairman Ben Bernanke said on Tueaday that the worst US recession since the 1930s had probably ended, while warning that growth may not be strong enough to quickly reduce the unemployment rate.
Berkshire Hathaway Inc chairman Warren Buffett said at a conference in California last week that his company was buying equities, while billionaire investor Kenneth Fisher said in an interview that global stocks are in the middle of a “V-shaped recovery,” led by emerging markets, that will last for at least another six months.
National benchmark indexes advanced in all 18 western European markets except Iceland. The UK’s FTSE 100 rallied 3.2 percent and Germany’s DAX added 1.4 percent. France’s CAC 40 increased 2.5 percent.
Ireland’s ISEQ Index rallied 6.1 percent, led by Allied Irish and Bank of Ireland PLC. Ireland’s National Asset Management Agency will buy loans with a combined book value of 40 billion euros from the two banks as the government seeks to purge them of souring assets.
Allied Irish said it may tap new and existing investors for capital as well as selling some assets to raise the 2 billion euros. Bank of Ireland shares climbed 20 percent.
Tueaday saw the one-year anniversary of Lehman Brothers Holdings Inc’s bankruptcy filing, which exacerbated the credit crunch and helped drag the global economy into its worst slowdown since World War II.
Losses at the world’s biggest financial institutions since the start of 2007 have widened to more than US$1.6 trillion.
NO RECIPROCITY: Taipei has called for cross-strait group travel to resume fully, but Beijing is only allowing people from its Fujian Province to travel to Matsu, the MAC said The Mainland Affairs Council (MAC) yesterday criticized an announcement by the Chinese Ministry of Culture and Tourism that it would lift a travel ban to Taiwan only for residents of China’s Fujian Province, saying that the policy does not meet the principles of reciprocity and openness. Chinese Deputy Minister of Culture and Tourism Rao Quan (饒權) yesterday morning told a delegation of Chinese Nationalist Party (KMT) lawmakers in a meeting in Beijing that the ministry would first allow Fujian residents to visit Lienchiang County (Matsu), adding that they would be able to travel to Taiwan proper directly once express ferry
STUMPED: KMT and TPP lawmakers approved a resolution to suspend the rate hike, which the government said was unavoidable in view of rising global energy costs The Ministry of Economic Affairs yesterday said it has a mandate to raise electricity prices as planned after the legislature passed a non-binding resolution along partisan lines to freeze rates. Chinese Nationalist Party (KMT) lawmakers proposed the resolution to suspend the price hike, which passed by a 59-50 vote. The Taiwan People’s Party (TPP) voted with the KMT. Legislative Speaker Han Kuo-yu (韓國瑜) of the KMT said the resolution is a mandate for the “immediate suspension of electricity price hikes” and for the Executive Yuan to review its energy policy and propose supplementary measures. A government-organized electricity price evaluation board in March
FAST RELEASE: The council lauded the developer for completing model testing in only four days and releasing a commercial version for use by academia and industry The National Science and Technology Council (NSTC) yesterday released the latest artificial intelligence (AI) language model in traditional Chinese embedded with Taiwanese cultural values. The council launched the Trustworthy AI Dialogue Engine (TAIDE) program in April last year to develop and train traditional Chinese-language models based on LLaMA, the open-source AI language model released by Meta. The program aims to tackle the information bias that is often present in international large-scale language models and take Taiwanese culture and values into consideration, it said. Llama 3-TAIDE-LX-8B-Chat-Alpha1, released yesterday, is the latest large language model in traditional Chinese. It was trained based on Meta’s Llama-3-8B
NOVEL METHODS: The PLA has adopted new approaches and recently conducted three combat readiness drills at night which included aircraft and ships, an official said Taiwan is monitoring China’s People’s Liberation Army (PLA) exercises for changes in their size or pattern as the nation prepares for president-elect William Lai’s (賴清德) inauguration on May 20, National Security Bureau (NSB) Director-General Tsai Ming-yen (蔡明彥) said yesterday. Tsai made the comment at a meeting of the Legislative Yuan’s Foreign Affairs and National Defense Committee, in response to Democratic Progressive Party (DPP) Legislator Wang Ting-yu’s (王定宇) questions. China continues to employ a carrot-and-stick approach, in which it applies pressure with “gray zone” tactics, while attempting to entice Taiwanese with perks, Tsai said. These actions aim to help Beijing look like it has