Stocks: Weekly review
Asian stocks fell, capping a benchmark index’s longest weekly losing streak since 2004, amid concern that Greece may default on its sovereign debt and potentially derail a global economic recovery.
Esprit Holdings Ltd., a global fashion retailer that gets most of its revenue from Europe, slid 4.1 percent in Hong Kong. Woodside Petroleum Ltd., Australia’s second-biggest oil and gas producer, sank 3.8 percent. Samsung Electronics Co. slumped 3.4 percent in Seoul after Research In Motion Ltd. (RIMM), which makes BlackBerry phones, said quarterly revenue may drop.
The MSCI Asia Pacific Index dropped 0.4 percent to 129.30 as of 7:02 p.m. in Tokyo, after earlier gaining as much as 0.3 percent. The gauge has lost 2.1 percent this week.
The Asia-Pacific gauge rounded out its seventh straight weekly decline amid concern that a recovery from the global recession may be derailed by Europe’s sovereign debt crisis and China’s steps to control inflation. That exceeds the six-week streak that occurred in the aftermath of the collapse of Lehman Brothers Holdings Inc. in 2008.
The MSCI Asia Pacific Index lost 5.7 percent this year through yesterday, compared with a gain of 0.8 percent by the S&P 500 and a drop of 3.3 percent by the Stoxx Europe 600 Index.
European stocks gained as German Chancellor Angela Merkel retreated from demands that bondholders shoulder a “substantial” part of the cost of a Greek rescue.
National Bank of Greece SA (ETE) soared 8.5 percent. Banca Popolare di Milano Scrl jumped 12 percent following a report that BNP Paribas SA made an offer for the bank.
The Stoxx Europe 600 Index rose 0.2 percent to 267.17 at the 4:30 p.m. close in London, trimming the gauge’s drop this week to 0.4 percent. The benchmark gauge has declined for seven consecutive weeks, its longest losing streak since 2008, as concern mounted that Greece will default on its debt.
Greek Prime Minister George Papandreou fired his finance minister in a Cabinet overhaul aimed at fending off a rebellion from within the ruling Pasok party and ensuring the passage of austerity measures needed to qualify for a bailout. European stocks fell to a three-month low yesterday after Papandreou said he would reshuffle the Cabinet and seek a confidence vote.
European stocks rallied as Merkel signaled her willingness to compromise on German demands that bondholders shoulder a “substantial” share of a Greek rescue, saying she’ll work with the European Central Bank to resolve the Mediterranean nation’s sovereign-debt crisis.
Sarkozy said a “breakthrough” had been made on the Greek debt crisis, following his meeting with Merkel.
U.S. stocks were poised to snap a six-week decline as European leaders moved closer to a compromise on a financial rescue for Greece and an index of leading American economic indicators beat estimates.
Wells Fargo & Co. (WFC) and Citigroup Inc. (C) rose at least 1.1 percent, following gains in European banks. BJ’s Wholesale Club Inc. (BJ) rallied 1.4 percent as shareholders Leonard Green & Partners LP and CVC International made a proposal to buy the third-largest U.S. warehouse-club chain. The Bloomberg U.S. Airlines Index of 11 stocks gained 3.2 percent as oil declined to the lowest level in almost four months.
The Standard & Poor’s 500 Index rose 0.3 percent to 1,271.40 at 1:01 p.m. in New York. The benchmark gauge has added less than 0.1 percent since June 10, preventing the longest weekly slump since March 2001.