European stocks declined this week as slower-than-forecast US economic growth overshadowed a rally in banks after EU stress tests eased concern that lenders may need to raise more capital.
Nestle SA and Unilever led food companies lower as US rivals Kellogg Co and Colgate-Palmolive Co reported revenue that missed estimates. Gamesa Corporacion Tecnologica SA tumbled 12 percent after reducing its forecast for wind turbine sales. UBS AG, Switzerland’s largest bank, surged the most in 15 months after earnings beat analysts’ estimates.
The STOXX Europe 600 Index slipped 0.2 percent to 255.35 this past week, trimming the gain in July to 4.9 percent. The gauge has fallen 6.2 percent from this year’s high on April 15 amid concern that Europe’s sovereign-debt crisis may hamper the economic revival.
“The GDP report raises concerns surrounding the sustainability of the recovery,” David Semmens, an economist with Standard Chartered Bank in New York, wrote in an e-mail. “The dire contribution from the US consumer will weigh on sentiment. Without a pick-up in hiring in the US we expect GDP growth to continue to fade through 2010.”
National benchmark indexes fell in 8 of the 18 western European markets. Germany’s DAX lost 0.3 percent and the UK’s FTSE 100 retreated 1 percent. France’s CAC 40 advanced 1 percent as Societe Generale SA and Credit Agricole SA rallied more than 12 percent.
Nestle, the world’s biggest food company, slid 4.1 percent, the biggest drop in almost three months. Unilever, the second-largest consumer-goods company, plunged 6.7 percent, the most since March last year.
Kellogg, the biggest US maker of breakfast cereal, and Colgate, the largest toothpaste maker, reported sales that missed analysts’ projections.
Deutsche Bank AG strategist Gareth Evans downgraded the European food and beverage industry to “neutral” from “overweight,” citing the sector’s performance this year.
Parmalat SpA, Italy’s biggest dairy food company, lost 7.2 percent after being downgraded to “underperform” at CA Cheuvreux. CSM NV, the world’s largest supplier of bakery ingredients, dropped 7.5 percent.
A measure of banking shares in the STOXX 600 posted the biggest gain among 19 industry groups, rallying 4.9 percent.
Greece’s Alpha Bank SA jumped 16 percent and Bank of Ireland PLC soared 15 percent. Royal Bank of Scotland Group PLC, Britain’s biggest government-owned bank, advanced 10 percent. UBS surged 15 percent, the most since April last year.
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
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
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
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