European stocks fell on concern that European governments are divided on how to contain the region’s sovereign-debt crisis after Germany unilaterally banned some bets against government bonds and financial institutions.
Stocks sensitive to economic growth including basic-resources and construction shares sank. Bank of Ireland PLC plummeted 21 percent after shareholders approved the sale of around 4 billion new shares.
The STOXX Europe 600 Index slipped 4.6 percent to 237.11 this week, the lowest level in more than six months, as all 19 industry groups dropped. The gauge entered a correction as it extended losses from this year’s high on April 15 to 13 percent. Investors withdrew US$12 billion from US and European equity funds in the week to Wednesday, the most in almost two years, according to EPFR Global.
“Fears that the debt crisis will cause a slowdown of the economy worldwide led to another downswing of the equity markets,” said Thomas Lusetti, a senior fund manager at Verwaltungs- & Privat Bank in Zurich, who helps manage about US$36.3 billion. “Germany’s ban was an additional factor in increasing uncertainty.”
The VSTOXX Index, which measures the cost of protecting against declines in the Euro STOXX 50 Index, rallied 8.4 percent this week, reaching a 15-month high of 49.87 on May 20.
National benchmark indexes fell all 18 western European markets except Spain. Germany’s DAX lost 3.8 percent and France’s CAC 40 slid 3.6 percent, while the UK’s FTSE 100 retreated 3.8 percent.
Germany’s BaFin markets regulator banned investors from naked short sales — speculating on declines in companies they don’t own — for 10 banks and insurers, as well as naked credit-default swaps on euro-area government bonds starting on Wednesday. German Chancellor Angela Merkel’s government rattled investors by raising concerns they won’t be able to hedge their European holdings or sell assets as the region’s debt crisis worsens.
The following day French Finance Minister Christine Lagarde told RTL radio that the 16 countries that share the euro need greater coordination of economic policies to avoid a financial crisis.
In Germany, business confidence unexpectedly fell this month. The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, eased to 101.5 from 101.6 last month. Economists expected an increase to 101.9, according to the median of 37 forecasts in a Bloomberg News survey. Ifo’s gauge of executives’ expectations fell to 103.7 from 104.
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
EYE ON STRAIT: The US spending bill ‘doubles security cooperation funding for Taiwan,’ while also seeking to counter the influence of China US President Joe Biden on Saturday signed into law a US$1.2 trillion spending package that includes US$300 million in foreign military financing to Taiwan, as well as funding for Taipei-Washington cooperative projects. The US Congress early on Saturday overwhelmingly passed the Further Consolidated Appropriations Act 2024 to avoid a partial shutdown and fund the government through September for a fiscal year that began six months ago. Under the package, the Defense Appropriations Act would provide a US$27 billion increase from the previous fiscal year to fund “critical national defense efforts, including countering the PRC [People’s Republic of China],” according to a summary
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)