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Asian stocks dropped, sending the regional gauge to its worst weekly performance since May, as Egyptian President Hosni Mubarak refused growing calls for his resignation, and amid lingering concern China will further tighten monetary policy.
Newcrest Mining Ltd., Australia’s biggest gold producer, dropped 1.4 percent after posting first-half earnings that missed estimates. China Resources Land Ltd., a state-linked developer, decreased 1.1 percent in Hong Kong after a newspaper reported new home sales in Shanghai dropped. Hana Financial Group Inc., South Korea’s fourth-largest financial company, declined 5.7 percent after announcing a share sale to fund the purchase of Korea Exchange Bank.
The MSCI Asia Pacific Excluding Japan Index gauge is heading for a 4.3 percent drop this week, the worst weekly performance since the period ended May 21, after China raised interest rates for the third time since mid-October to curb inflation and as Egyptians intensified protests after President Mubarak defied calls for his immediate resignation.
Of the 102 companies that reported results since the beginning of the year, 54 had a negative surprise, while 44 had a positive surprise.
European stocks posted a second weekly gain as companies from Swatch Group AG to Alcatel-Lucent SA reported better-than-expected earnings and after Egypt’s president stepped down.
Swatch climbed 8.5 percent, while Alcatel surged 35 percent. ArcelorMittal advanced after forecasting a stronger year ahead as demand recovers. Nokia Oyj, the world’s biggest maker of mobile phones, dropped 14 percent after saying it will form a software partnership with Microsoft Corp.
The Stoxx 600 Europe Index gained 0.7 percent to 287.99. The gauge reached the highest level since 2008 earlier this week,
“Earnings have been reassuring,” said Guillaume Duchesne, equity strategist at BGL BNP Paribas in Luxembourg. “There have been positive surprises. Sales have progressed. Our vision of the market is positive, without being euphoric.”
Some 57 percent of the 143 companies in the Stoxx 600 that have reported results since Jan. 10 topped per-share earnings projections
Deutsche Boerse AG climbed 8.4 percent. The company said it is in advanced talks to buy NYSE Euronext in an all-stock transaction that would create the world’s biggest exchange operator. London Stock Exchange Group Plc gained 6.3 percent after the company confirmed it will merge with TMX Group Inc.
UBS AG gained 5.4 percent. Switzerland’s biggest bank attracted net new money from wealthy clients for a second straight period even as fourth-quarter net income missed estimates.
Automakers posted the biggest gain among the 19 industry groups in the Stoxx 600, led by Nokian Renkaat Oyj. The Nordic region’s biggest tiremaker jumped 12 percent this week. The company on Feb. 9 reported fourth-quarter pretax profit that beat analyst estimates.
U.S. stocks rose, extending a second straight weekly advance, as Egyptian President Hosni Mubarak’s resignation and a jump in consumer confidence to an eight-month high bolstered optimism in the global economic recovery.
The Standard & Poor’s 500 Index rose 1.3 percent last week.
“As some of the uncertainty clears in Egypt, people can focus on fundamentals,” said Peter Sorrentino, who helps oversee $14.4 billion at Huntington Asset Advisors in Cincinnati. “We’ve had a fair amount of pretty good economic reports, including consumer confidence. Unfortunately, the optimism was recently disrupted by geopolitical concern. We’ll see how that plays out. There’s enough momentum in the U.S. economy right now.”
The S&P 500 rose 5.1 percent this year through yesterday as better-than-forecast economic data and company earnings boosted confidence in the economic recovery. Earnings at 74 percent of the 348 companies in the S&P 500 that reported results since Jan. 10 posted per-share profit that beat analyst estimates.
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