European shares last week fell by the most in almost three months after US President Barack Obama called for a limit on risk-taking by banks and concern mounted that China will take measures to stem economic growth.
Barclays PLC, Societe Generale SA and Bank of Ireland PLC led a gauge of bank stocks to a five-month low as Obama proposed that the size and trading activities of financial institutions be limited.
Rio Tinto PLC and Antofagasta PLC both sank more than 8 percent as copper slid for a second week.
The Dow Jones STOXX 600 Index erased all of its gains for the year last week, dropping 2.6 percent to 249.91, the sharpest weekly retreat since October.
Even so, the benchmark is still up 58 percent since March, driven by record-low interest rates, about US$12 trillion committed by governments worldwide and optimism about economic growth and corporate profits.
“Equity markets have climbed far higher than many expected and a bout of profit-taking is due,” said London-based Mike Lenhoff, who helps oversee about US$35.5 billion as chief strategist at Brewin Dolphin Securities Ltd.
Obama’s proposals “have really jolted the equity markets.
Their implementation may not see the light of day but they might continue to affect sentiment towards banks.”
Stocks also fluctuated as more than 60 companies in the Standard & Poor’s 500 Index reported fourth-quarter results last week in the US.
Some of the biggest banks including Citigroup Inc, Bank of America Corp, Morgan Stanley and Goldman Sachs Group Inc posted results.
National benchmark indexes fell in all 18 western European markets. The UK’s FTSE 100 retreated 2.8 percent, while Germany’s DAX fell 3.1 percent and France’s CAC 40 slid 3.4 percent.
Bank shares tumbled 6.2 percent to the lowest since August last year, amid concern Obama’s plans to rein in banks will hurt earnings.
The proposed reforms include a ban on financial institutions running proprietary trading operations or investing in hedge funds and private equity funds.
Barclays, the UK’s second-biggest bank, and France’s Societe Generale both sank 13 percent. Credit Suisse Group AG, Switzerland’s biggest bank by market value, declined 9.5 percent.
Basic-resource stocks this week lost 5.5 percent amid fears China, the world’s largest user of industrial metals, may raise interest rates. Reports showed Chinese inflation accelerated to a more-than-forecast 1.9 percent last month and GDP climbed 10.7 percent, the fastest pace since 2007.
Rio Tinto, the world’s third-largest mining company, sank 8.1 percent, as did Antofagasta, the owner of copper mines in Chile. Kazakhmys PLC, Kazakhstan’s biggest copper producer, retreated 8.2 percent.
Drug stocks were among just two industry groups to rise last week, along with food and beverage shares.
The gauge gained 0.9 percent as investors speculated Obama’s plan for healthcare overhaul in the US will be derailed after the Democrats lost a key Senate seat.
LONG FLIGHT: The jets would be flown by US pilots, with Taiwanese copilots in the two-seat F-16D variant to help familiarize them with the aircraft, the source said The US is expected to fly 10 Lockheed Martin F-16C/D Block 70/72 jets to Taiwan over the coming months to fulfill a long-awaited order of 66 aircraft, a defense official said yesterday. Word that the first batch of the jets would be delivered soon was welcome news to Taiwan, which has become concerned about delays in the delivery of US arms amid rising military tensions with China. Speaking on condition of anonymity, the official said the initial tranche of the nation’s F-16s are rolling off assembly lines in the US and would be flown under their own power to Taiwan by way
OBJECTS AT SEA: Satellites with synthetic-aperture radar could aid in the detection of small Chinese boats attempting to illegally enter Taiwan, the space agency head said Taiwan aims to send the nation’s first low Earth orbit (LEO) satellite into space in 2027, while the first Formosat-8 and Formosat-9 spacecraft are to be launched in October and 2028 respectively, the National Science and Technology Council said yesterday. The council laid out its space development plan in a report reviewed by members of the legislature’s Education and Culture Committee. Six LEO satellites would be produced in the initial phase, with the first one, the B5G-1A, scheduled to be launched in 2027, the council said in the report. Regarding the second satellite, the B5G-1B, the government plans to work with private contractors
‘NARWHAL’: The indigenous submarine completed its harbor acceptance test recently and is now under heavy guard as it undergoes tests in open waters, a source said The Hai Kun (海鯤), the nation’s first indigenous defense submarine, yesterday began sea trials, sailing out of the Port of Kaohsiung, a military source said. Also known as the “Narwhal,” the vessel departed from CSBC Corp, Taiwan’s (台灣國際造船) shipyard at about 8am, where it had been docked. More than 10 technicians and military personnel were on deck, with several others standing atop the sail. After recently completing its harbor acceptance test, the vessel has started a series of sea-based trials, including tests of its propulsion and navigational systems, while partially surfaced, the source said. The Hai Kun underwent tests in the port from
MISSION: The Indo-Pacific region is ‘the priority theater,’ where the task of deterrence extends across the entire region, including Taiwan, the US Pacific Fleet commander said The US Navy’s “mission of deterrence” in the Indo-Pacific theater applies to Taiwan, Pacific Fleet Commander Admiral Stephen Koehler told the South China Sea Conference on Tuesday. The conference, organized by the Center for Strategic and International Studies (CSIS), is an international platform for senior officials and experts from countries with security interests in the region. “The Pacific Fleet’s mission is to deter aggression across the Western Pacific, together with our allies and partners, and to prevail in combat if necessary, Koehler said in the event’s keynote speech. “That mission of deterrence applies regionwide — including the South China Sea and Taiwan,” he
RSS