European stocks dropped for a fourth straight week, the longest stretch of losses since March, as oil retreated and concern mounted that earnings reports will show the economic slump is far from over.
Royal Dutch Shell PLC, BP PLC and Total SA slid more than 3 percent as crude headed for the biggest weekly drop since January. Aviva PLC led insurers lower on speculation it will cut its dividend.
Renault SA, France’s second-largest automaker, sank 11 percent as chief executive officer Carlos Ghosn said the expiration of state-backed sales incentives will offset any improvement in demand next year.
The Dow Jones STOXX 600 Index declined 3.4 percent in the past week to 197.25, the lowest since April. The measure has slumped 8.2 percent since June 11 on speculation share prices have outpaced the outlook for economic growth after a three-month rally pushed valuations to 25.4 times earnings, the highest level since 2004.
“We are still in a consolidation phase after the gains we saw in March and April,” said Daniel Knuchel, who oversees about US$3 billion as chief investment officer at AAM Privatbank AG in Zurich. “The risk appetite has clearly retreated since then and sentiment is less positive. Markets are very news driven and investors are waiting for the earnings season.”
The IMF forecast the global economy will shrink 1.4 percent this year before expanding 2.5 percent next year. In April, the Washington-based lender had predicted a 1.3 percent contraction this year, followed by 1.9 percent growth next year.
National benchmark indexes fell in all 18 western European markets. The UK’s FTSE 100 slipped 2.6 percent and France’s CAC 40 retreated 4.4 percent. Germany’s DAX dropped 2.8 percent as Porsche SE declined.
Shell, Europe’s biggest oil company, decreased 3.8 percent in London. BP and Total, the second and third-largest, slid 3.7 percent and 4.6 percent respectively.
Aviva, the UK’s largest insurer, tumbled 19 percent, dragging a gauge of insurers 6.7 percent lower for the biggest decline among 19 industry groups in the STOXX 600.
“We estimate that Aviva cannot rule out reducing its dividend distribution by 20 percent at least this year,” CA Cheuvreux analyst Jean D’Herbecourt in Paris wrote in a report on Tuesday, reducing his recommendation on the stock to “underperform” from “outperform.”
Bloomberg’s analysis and research showed on Friday that the insurer may reduce its interim dividend next month to £0.0875 a share from £0.1309 last year.
Infineon Technologies AG surged 12 percent. Europe’s second-largest chipmaker agreed to sell its Wireline Communications business to an affiliate of Golden Gate Capital Corp for 250 million euros (US$346 million).
PREPARATION: Ferry lines and flights were canceled ahead of only the second storm to hit the nation in November, while many areas canceled classes and work Authorities yesterday evacuated more than 3,000 people ahead of approaching Tropical Storm Fung-wong, which is expected to make landfall between Kaohsiung and Pingtung County this evening. Fung-wong was yesterday morning downgraded from a typhoon to a tropical storm as it approached the nation’s southwest coast, the Central Weather Administration (CWA) said, as it issued a land alert for the storm. The alert applies to residents in Tainan, Kaohsiung, Pingtung and Taitung counties, and the Hengchun Peninsula (恆春). As of press time last night, Taichung, Tainan, Kaohsiung, and Yilan, Miaoli, Changhua, Yunlin, Pingtung and Penghu counties, as well as Chiayi city and county had
The Central Weather Administration (CWA) yesterday issued a sea alert for Typhoon Fung-wong (鳳凰) as it threatened vessels operating in waters off the Pratas Islands (Dongsha Islands, 東沙群島), the Bashi Channel and south of the Taiwan Strait. A land alert is expected to be announced some time between late last night and early this morning, the CWA said. As of press time last night, Taoyuan, as well as Yilan, Hualien and Penghu counties had declared today a typhoon day, canceling work and classes. Except for a few select districts in Taipei and New Taipei City, all other areas and city
SELF-DETERMINATION: German lawmakers add earth to an art installation in front of the Reichstag to show that the face of a nation lies with its people, Tsai Ing-wen said Taiwan’s future should be decided by Taiwanese, German-Taiwan Parliamentary Friendship Group chairman Till Steffen said yesterday, while giving former president Tsai Ing-wen (蔡英文) a tour of the German parliament building. Tsai arrived in Berlin on Sunday and the following day delivered a keynote speech at the Berlin Freedom Conference titled “Threats facing democracies: Taiwan’s experience defending freedom.” Tsai yesterday attended a tea gathering at the Bundestag, joined by former friendship group chairman of 15 years Klaus-Peter Willsch, German defense affairs specialist Roderich Kiesewetter and Federal Ministry of Education, Family Affairs, Senior Citizens, Women and Youth Parliamentary State Secretary Michael Brand. Noting that the
BOOST IN CONFIDENCE: The sale sends a clear message of support for Taiwan and dispels rumors that US President Donald Trump ‘sold out’ the nation, an expert said The US government on Thursday announced a possible sale to Taiwan of fighter jet parts, which was estimated to cost about US$330 million, in a move that an expert said “sends a clear message of support for Taiwan” amid fears that Washington might be wavering in its attitude toward Taipei. It was the first announcement of an arms sale to Taiwan since US President Donald Trump returned to the White House earlier this year. The proposed package includes non-standard components, spare and repair parts, consumables and accessories, as well repair and return support for the F-16, C-130 and Indigenous Defense Fighter aircraft,
RSS