Europe’s Dow Jones STOXX 600 Index resumed gains this week, erasing its loss for the year and posting a record monthly rally amid better-than-expected earnings and speculation that the global recession is easing.
BASF SE, the world’s biggest chemical company, Sanofi-Aventis SA and Siemens AG rose as their profits topped forecasts. Banks surged to the highest since December on expectations the industry is recovering from the credit crisis.
The STOXX 600 added 2.3 percent to 200.23 in the four days this week, its seventh advance in eight weeks. Europe’s regional benchmark climbed 13 percent last month, the biggest monthly gain since records began in 1987. The measure, which is now up 0.9 percent for the year, did not update on Friday, as all European markets except the UK and Denmark were closed.
Banks led the April advance as Credit Suisse Group AG beat analysts’ profit forecasts and Barclays PLC indicated its first-quarter performance was “well ahead” of last year. Confidence in the outlook for the European economy rose, a report showed this week, while investors also speculated that government plans to purchase illiquid assets from banks will pull the global economy out of its recession.
“We have significant numbers supporting our general expectation that the economy will turn around in late 2009,” said Henrik Drusebjerg, a senior strategist at Nordea in Copenhagen. “If that is the case, equity markets will turn around six to nine months before.”
The UK’s FTSE 100 rallied 2.1 percent in the week, Germany’s DAX rose 2 percent and France’s CAC 40 added 1.8 percent. Sweden’s OMX Stockholm 30 Index lost 2 percent as profit at Ericsson AB fell for a seventh straight quarter.
BASF surged 5.3 percent after it reported first-quarter net income of 375 million euros (US$498.8 million), beating the 124 million euro average estimate of analysts.
Sanofi jumped 7.5 percent. France’s largest drugmaker said April 29 that first-quarter adjusted net income climbed 16 percent to 2.18 billion euros, helped by increased demand for its Lantus medicine for diabetics.
That beat the 1.98 billion-euro median estimate of 10 analysts surveyed by Bloomberg.
Siemens, Europe’s largest engineering company, advanced 3.5 percent. Operating profit at the company’s main industry, energy and health-care units, referred to as “sector profit,” climbed to 1.84 billion euros from 1.29 billion euros, the company said on Wednesday. Analysts in a Bloomberg survey predicted 1.65 billion euros.
More than half of the 132 companies in the STOXX 600 that reported earnings results from April 7 to Thursday exceeded analysts’ predictions, data compiled by Bloomberg show. That trails the 70 percent of companies in the S&P 500 that beat estimates.
The STOXX 600 Banks Index climbed 5 percent to the highest since Dec. 10. The measure, the heaviest among 19 industries in the broader STOXX 600, tumbled 83 percent from April 2007 to this March as global losses tied to subprime mortgages at financial firms climbed toward more than US$1.3 trillion.
The Ministry of Transportation and Communications yesterday inaugurated the Danjiang Bridge across the Tamsui River in New Taipei City, saying that the structure would be an architectural icon and traffic artery for Taiwan. Feted as a major engineering achievement, the Danjiang Bridge is 920m long, 211m tall at the top of its pylon, and is the longest single-pylon asymmetric cable-stayed bridge in the world, the government’s Web site for the structure said. It was designed by late Iraqi-British architect Zaha Hadid. The structure, with a maximum deck of 70m, accommodates road and light rail traffic, and affords a 200m navigation channel for boats,
PRECISION STRIKES: The most significant reason to deploy HIMARS to outlying islands is to establish a ‘dead zone’ that the PLA would not dare enter, a source said A High Mobility Artillery Rocket System (HIMARS) would be deployed to Penghu County and Dongyin Island (東引) in Lienchiang County (Matsu) to force the Chinese military to retreat at least 100km from the coastline, a military source said yesterday. Taiwan has been procuring HIMARS and Army Tactical Missile Systems (ATACMS) from the US in batches. Once all batches have been delivered, Taiwan would possess 111 HIMARS units and 504 ATACMS, which have a range of 300km. Considering that “offense is the best defense,” the military plans to forward-deploy the systems to outlying islands such as Penghu and Dongyin so that
WHAT WAS ALL THAT FOR? Jaw Shaw-kong said that Cheng Li-wen had pushed for more drastic cuts and attacked him, just for the outcome to be nearly identical to his bill The legislature yesterday passed a supplementary budget bill to fund the purchase of separate packages of US military equipment, with the combined amount of spending capped at NT$780 billion (US$24.8 billion). The Chinese Nationalist Party (KMT) and Taiwan People’s Party (TPP) used their legislative majority to pass the bill, which runs until 2033 and has two main funding provisions. One was for NT$300 billion of arms sales already approved by the US for Taiwan on Dec. 17 last year, the other was for NT$480 billion for another arms package expected to be announced by Washington. The bill, which fell short of the NT$1.25
‘CLEAR MESSAGE’: The bill would set up an interagency ‘tiger team’ to review sanctions tools and other economic options to help deter any Chinese aggression toward Taiwan US Representative Young Kim has introduced a bill to deter Chinese aggression against Taiwan, calling for an interagency “tiger team” to preplan coordinated sanctions and economic measures in response to possible Chinese military or political action against Taiwan. “[Chinese President] Xi Jinping [習近平] has directed the People’s Liberation Army to be ready to invade Taiwan by 2027. China has a plan. America should have one too,” Kim said in a news release on Thursday last week. She introduced the “Deter PRC [People’s Republic of China] aggression against Taiwan act” to “ensure the US has a coordinated sanctions strategy ready should
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