European stocks declined for a second week amid concern economic growth may be held back by the resurgent sovereign-debt crisis and measures by China to tame inflation.
Basic-resource shares led declines as copper slid on concern demand may weaken. Petroleum Geo-Services ASA fell 11 percent after raising 1.6 billion Norwegian kroner (US$267 million) selling stock. Actelion Ltd jumped 12 percent as Amgen Inc considers a takeover offer for the Swiss drugmaker.
The benchmark STOXX Europe 600 Index fell 0.3 percent this week, the biggest drop this month and extending the 0.7 percent fall from the previous five days.
“The two main concerns are the sovereign-debt crisis in Ireland and the inflation bubble risk in China,” said Philipp Musil, who helps oversee about US$10 billion at Semper Constantia Privatbank AG in Vienna. “Global growth depends on the resolution of those two problems.”
Irish Prime Minister Brian Cowen is edging toward accepting a rescue package that may threaten the country’s low-tax policies and put voters on the hook to repay loans the central bank says may be worth “tens of billions” of euros.
Officials from the EU and the IMF are in Dublin assessing the books of Ireland’s banks. The Irish government estimated rescuing the financial services industry alone might cost as much as 50 billion euros (US$68 billion).
In the UK, a report showed inflation unexpectedly accelerated last month, exceeding the British government’s 3 percent limit and forcing Bank of England Governor Mervyn King to write his fourth letter of explanation to the UK Treasury this year.
Paris-based Credit Agricole SA and Lloyds Banking Group PLC, the UK’s largest mortgage lender, led European banking shares lower, falling 5.1 percent and 4.1 percent, respectively.
JITTERS: Nexperia has a 20 percent market share for chips powering simpler features such as window controls, and changing supply chains could take years European carmakers are looking into ways to scratch components made with parts from China, spooked by deepening geopolitical spats playing out through chipmaker Nexperia BV and Beijing’s export controls on rare earths. To protect operations from trade ructions, several automakers are pushing major suppliers to find permanent alternatives to Chinese semiconductors, people familiar with the matter said. The industry is considering broader changes to its supply chain to adapt to shifting geopolitics, Europe’s main suppliers lobby CLEPA head Matthias Zink said. “We had some indications already — questions like: ‘How can you supply me without this dependency on China?’” Zink, who also
At least US$50 million for the freedom of an Emirati sheikh: That is the king’s ransom paid two weeks ago to militants linked to al-Qaeda who are pushing to topple the Malian government and impose Islamic law. Alongside a crippling fuel blockade, the Group for the Support of Islam and Muslims (JNIM) has made kidnapping wealthy foreigners for a ransom a pillar of its strategy of “economic jihad.” Its goal: Oust the junta, which has struggled to contain Mali’s decade-long insurgency since taking power following back-to-back coups in 2020 and 2021, by scaring away investors and paralyzing the west African country’s economy.
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
AI BOOST: Next year, the cloud and networking product business is expected to remain a key revenue pillar for the company, Hon Hai chairman Young Liu said Manufacturing giant Hon Hai Precision Industry Co (鴻海精密) yesterday posted its best third-quarter profit in the company’s history, backed by strong demand for artificial intelligence (AI) servers. Net profit expanded 17 percent annually to NT$57.67 billion (US$1.86 billion) from NT$44.36 billion, the company said. On a quarterly basis, net profit soared 30 percent from NT$44.36 billion, it said. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said earnings per share expanded to NT$4.15 from NT$3.55 a year earlier and NT$3.19 in the second quarter. Gross margin improved to 6.35 percent,
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