European stocks posted their first weekly drop in more than a month, after disappointing US housing data and a surge in the cost to protect from a Greek default reignited concern about the global economic recovery.
BP PLC led energy companies lower, tumbling 15 percent to a 14-year low. Piraeus Bank SA and Alpha Bank AE paced a retreat by bank stocks, both dropping 10 percent in Athens. BHP Billiton Ltd and Rio Tinto Group lost more than 3 percent after the appointment of a new Australian prime minister failed to allay concerns about the government’s proposed mining tax.
The STOXX Europe 600 Index dropped 2.8 percent to 248.33, snapping four straight weeks of gains, as all 19 industry groups fell. The gauge has fallen 8.8 percent from this year’s high on April 15 amid concern about the impact of Europe’s debt crisis.
“It is possible that the market situation will worsen as the sovereign debt crisis spreads to other asset classes,” said Franck Dixmier, chief investment officer for Allianz Global Investors Investments Europe, which oversees about 110 billion euros (US$136 billion).
The Federal Reserve this week repeated its pledge to keep interest rates near zero for an “extended period,” while signaling that European indebtedness may harm US growth.
National benchmark indexes declined in all 18 western European markets this week except Iceland. Germany’s DAX dropped 2.4 percent and France’s CAC 40 retreated 4.5 percent.
The UK’s FTSE 100 retreated 3.9 percent as British Chancellor of the Exchequer George Osborne unveiled a levy on banks and an increase in sales tax in an emergency budget that seeks to guard the country’s top credit rating without strangling the economic recovery.
FIVE-YEAR WINDOW? A defense institute CEO said a timeline for a potential Chinese invasion was based on expected ‘tough measures’ when Xi Jinping seeks a new term Most Taiwanese are willing to defend the nation against a Chinese attack, but the majority believe Beijing is unlikely to invade within the next five years, a poll showed yesterday. The poll carried out last month was commissioned by the Institute for National Defense and Security Research, a Taipei-based think tank, and released ahead of Double Ten National Day today, when President William Lai (賴清德) is to deliver a speech. China maintains a near-daily military presence around Taiwan and has held three rounds of war games in the past two years. CIA Director William Burns last year said that Chinese President Xi Jinping
REACTION TO LAI: A former US official said William Lai took a step toward stability with his National Day speech and the question was how Beijing would respond US Secretary of State Antony Blinken yesterday warned China against taking any “provocative” action on Taiwan after Beijing’s reaction to President William Lai’s (賴清德) speech on Double Ten National Day on Thursday. Blinken, speaking in Laos after an ASEAN East Asia Summit, called the speech by Lai, in which he vowed to “resist annexation,” a “regular exercise.” “China should not use it in any fashion as a pretext for provocative actions,” Blinken told reporters. “On the contrary, we want to reinforce — and many other countries want to reinforce — the imperative of preserving the status quo, and neither party taking any
President William Lai (賴清德) yesterday said that China has “no right to represent Taiwan,” but stressed that the nation was willing to work with Beijing on issues of mutual interest. “The Republic of China has already put down roots in Taiwan, Penghu, Kinmen and Matsu,” Lai said in his first Double Ten National Day address outside the Presidential Office Building in Taipei. “And the Republic of China and the People’s Republic of China [PRC] are not subordinate to each other.” “The People’s Republic of China has no right to represent Taiwan,” he said at the event marking the 113th National Day of
RISK REMAINS: An official said that with the US presidential elections so close, it is unclear if China would hold war games or keep its reaction to angry words The Ministry of National Defense said it was “on alert” as it detected a Chinese aircraft carrier group to Taiwan’s south yesterday amid concerns in Taiwan about the possibility of a new round of Chinese war games. The ministry said in a statement that a Chinese navy group led by the carrier Liaoning had entered waters near the Bashi Channel, which connects the South China Sea and the Pacific Ocean and separates Taiwan from the Philippines. It said the carrier group was expected to enter the Western Pacific. The military is keeping a close watch on developments and “exercising an
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