European stocks declined for the first week in five as worse-than-estimated earnings from BASF SE and ABB Ltd raised concern the economic recovery is faltering.
The STOXX Europe 600 Index slid 0.3 percent to 298.91 this week. The benchmark gauge has rallied 4.9 percent so far this month, after its decline last month, which was the first in 13 months. A gauge of expected volatility in euro-area stocks, based on options prices, rose for the first week in three.
“Results in Europe are coming out as unimpressive,” Alberto Espelosin, who helps oversee US$1.5 billion at Abante Asesores Gestion in Madrid, said in a phone interview. “Analysts will still have to pencil in slower growth. Stocks haven’t had a strong correction downwards yet and this could happen any time.”
Analysts have reduced their estimates for annual earnings at companies listed on the STOXX 600 by 7.8 percent since the start of the year, according to data compiled by Bloomberg.
The STOXX 600 plunged 11 percent from May 22 through June 24 amid speculation the US Federal Reserve will begin tapering bond purchases as soon as September. The gauge has rebounded 8.4 percent since then after the Fed and other central banks pledged to continue stimulus measures.
Manufacturing indices based on surveys of purchasing managers rose in the US this month and unexpectedly climbed to a level that signals expansion in the euro area, London-based Markit Economics said this week.
National benchmark indices fell in nine of the 18 Western European markets this week. The UK’s FTSE 100 slipped 1.1 percent, France’s CAC 40 gained 1.1 percent and Germany’s DAX Index dropped 1 percent.
BASF retreated 5.9 percent. The world’s biggest chemical company said second-quarter earnings before interest, taxes and one-time items fell 5.4 percent to 1.83 billion euros (US$2.41 billion). The average estimate of analysts in a Bloomberg survey had called for 1.99 billion euros.
ABB slid 4.7 percent. The largest maker of power transformers posted second-quarter net profit of US$763 million, missing the US$779 million average estimate of analysts surveyed by Bloomberg.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
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