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Mounting optimism about the outlook for Japan’s economy helped shares in Tokyo return to levels not seen since the March earthquake and tsunami last week.
The Nikkei 225 Average ended at 10,137.73, up 2.7% over the week, after briefly breaking above 10,200 to a four-month high on Friday.
The gain marked a third successive weekly increase for the benchmark indicator. The broader Topix index closed at 874.34, up 2.4% over the week.
Shares in leading Japanese exporters had a strong week on the back of hopes that the global recovery could be back on track.
Canon rose 3.2% over the five-day period while Toyota Motor added 3.3% and Honda Motor climbed 4.8%.
Chinese stocks also enjoyed a third straight week of gains.
The Shanghai Composite rose 1.4% to 2,797.77 while, in Hong Kong, the Hang Seng index climbed 1.5% to 22,726.43.
The People’s Bank of China on Wednesday raised its benchmark lending and deposit rates by 25 basis points.
Investors will now be awaiting the imminent release of Chinese inflation data for any clues about further tightening moves.
European stocks declined last week as concern deepened that the region’s debt crisis will spread and a report showed U.S. employers added fewer workers than forecast, fueling speculation the economic recovery is slowing.
UniCredit SpA, Italy’s biggest lender, and Portugal’s Banco Espirito Santo SA (BES) led declines in banking shares, sliding more than 7 percent. British Sky Broadcasting Plc fell the most since 2008 on speculation its acquisition by News Corp. will be delayed amid a phone-tapping scandal at the News of the World.
CSM NV plummeted 15 percent after the world’s largest maker of bakery ingredients said earnings declined.
The benchmark Stoxx Europe 600 Index slid 0.4 percent to 273.76 this week.
European stocks erased their weekly advance Friday after Labor Department data showed U.S. employers added 18,000 workers in June, the fewest in nine months.
European Central Bank officials increased the key interest rate by 25 basis points to 1.5% this week, matching forecasts by all 55 economists in a Bloomberg survey. President Jean-Claude Trichet said the ECB will suspend its minimum credit-rating threshold on Portuguese bonds after Moody’s Investors Service lowered the country’s debt to junk.
Italy’s FTSE MIB slid 7.2%, the most in 14 months, as UniCredit sank 20% and Intesa Sanpaolo SpA plummeted 14%.
Banco Espirito Santo slumped 7.1% while Banco Comercial Portugues SA retreated 13% to a record low. Moody’s cut Portugal’s credit rating to Ba2 as the nation joined Greece as the second euro-region country with a non-investment grade rating.
Credit Agricole SA (ACA) dropped 12% and National Bank of Greece SA slid 10%.
CSM plunged 15%, the biggest drop since November 2008. The maker of bakery ingredients said earnings came to about 80 million euros ($114 million) in the first half. It reported 102.5 million euros a year earlier.
ThyssenKrupp AG posted the biggest weekly drop in 14 months, falling 6.9%, as Germany’s largest steelmaker sold a 9.6% stake to reduce debt. The company sold 49.5 million shares at 32.95 euros each, raising 1.63 billion euros.
Stocks on Wall Street sank, trimming the Standard & Poor’s 500 Index’s biggest two-week gain since 2009.
The S&P 500 pared the two-week rally to 5.9% last week.
Financial stocks led the way down on Wall Street as weaker-than-expected employment numbers dashed hopes that the “soft patch” in the US economy was coming to an end.
BB&T suffered the most in the financial sector, losing 3.3%.
Bank of America was down 1.9%, despite news that it had reached a deal to sell its Balboa Life Insurance unit to Securian Financial, a US provider of insurance and retirement plans.
In the wider market, the S&P 500 index was still up 0.3% over the week.
In the industrial space, Caterpillar was down 1.1% despite news that China’s regulator had approved its acquisition of mining equipment firm, Bucyrus International.
Elsewhere, Cummins was down 1.9% while the S&P industrial index was 1.2%.
The worst performing stock on the S&P 500 index was JDS Uniphase, which fell 4.6%.
The Dow Jones Industrial Average was up 0.6% at 12,657.05, while the Nasdaq Composite rose 1.6% to 2,859.81 over the week.
In corporate news last week, News Corp was in focus as the furore over allegations of phone hacking at one of its British newspapers escalated. The stock was down 7.3% over the week, as the paper in question was closed down and some speculated that News Corp’s proposed takeover of BSkyB, the satellite broadcaster, could be in jeopardy.
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