European shares fell for a third week, capping the biggest monthly drop since February last year, as concern grew countries worldwide may step up plans to withdraw stimulus measures and some earnings disappointed investors.
Xstrata PLC and ArcelorMittal led basic-resources shares to the biggest decline among 19 industry groups in the Dow Jones STOXX 600 Index last week. Fiat SpA sank 7.7 percent after the Italian automaker forecast lower western European industry sales. Banco Bilbao Vizcaya Argentaria SA retreated 8.6 percent as Spain’s second-biggest lender reported fourth-quarter earnings that missed analysts’ estimates.
The STOXX 600 slipped 1.2 percent to 246.96, bringing the monthly drop to 2.7 percent. Companies in the gauge are expected to report a 6.8 percent increase in last year’s earnings on average, while profits may climb 33 percent this year, analyst estimates compiled by Bloomberg showed.
“The expectations regarding profit development were very ambitious and although we had mainly positive surprises, some companies are also more cautious,” said Daniel Knuchel, who oversees about US$3 billion as chief investment officer at AAM Privatbank in Zurich. “We have entered a consolidation phase that may last for another two or three months before we see stabilization.”
The STOXX 600 has declined 5.1 percent from this year’s high on Jan. 19 as US President Barack Obama called for limits on risk-taking by banks and China moved to restrict lending to cool growth. The gauge is still 56 percent above its low last year.
The European Central Bank could take further steps in the first half of the year to withdraw liquidity from the banking system, council member Axel Weber said last week. Some Chinese banks were ordered to recall excess loans advanced this month to meet regulatory requirements, the Securities Times reported, citing an unidentified person familiar with the situation.
Stocks recouped some losses on Friday after a report showed the US economy expanded at a faster pace than estimated in the fourth quarter. The 5.7 percent increase in GDP, which exceeded the median forecast of economists surveyed by Bloomberg News, marked the best performance since the third quarter of 2003, US Department of Commerce figures showed.
National benchmark indexes fell in 12 of the 18 western European markets. The UK’s FTSE 100 retreated 2.2 percent as Man Group PLC tumbled. Germany’s DAX fell 1.5 percent and France’s CAC 40 slid 2.1 percent.
Basic-resources shares dropped the most among the industry groups in the STOXX 600, falling 4.6 percent, as copper posted its worst monthly performance since 2008. Xstrata, the fourth-largest copper producer, dropped 8.3 percent. ArcelorMittal, the biggest steelmaker, slid 6 percent. Rio Tinto Group, the third-largest mining company, lost 5.9 percent.
Fiat dropped 7.7 percent. The Italian carmaker that bought a 20 percent stake in Chrysler Group LLC said the western European auto market will shrink by at least 12 percent, prompting the company to postpone sales of some models.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft