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08.08.2011 07:11

STOCKS: Weekly's review

Asian stock markets ended the week significantly lower.
By the end of the week the Japan’ Nikkei 225 fell by 5.42% to 9,299.88.
The Hong Kong’ Hang Seng shed 6.66% to 20,946.10.
The Australia’ S&P/ASX 200 closed lower 7.22% at 4,169.70.
The China’ Shanghai Composite Index dropped by 2.79% to 2,626.42.
Fears of a slowdown in global growth also drove down the shares of stocks, carmakers and electronics groups. The sell-off in global markets hit Asian stocks hard this week as the region’s banks slid under the weight of the heavy selling of financial assets.
Japan's yen-selling intervention couldn’t support the Nikkei index. In addition the currency erased the effect of Japan's yen-selling intervention nearly by half at the turn of the week. Earlier The Bank of Japan expanded its asset-purchase fund to 15 trillion yen ($189 billion) from 10 trillion yen and left the benchmark interest rate unchanged at the level of 0-0.1%.
The region’s energy sector stocks suffered losses amid falling oil prices. At the end of the week shares of Inpex declined by 11% in Japan, Cnooc dropped 10.9% in Hong Kong, Woodside Petroleum lost 9.9% in Australia.
Among the financials, ICBC fell 7.9% and Tokyo’s Shinsei Bank shed 6.1%.
Mitsubishi UFJ Financial, Japan’s largest publicly traded bank, limited its weekly losses after a threefold increase in first-quarter net profit.
It worth moted some automakers, which released quarterly financial reports this week.
Among the financials, ICBC fell 7.9 per cent to HK5.46 and Tokyo’s Shinsei Bank shed 6.1 per cent to Y92.
Mitsubishi UFJ Financial , Japan’s largest publicly traded bank, limited its weekly losses after a threefold increase in first-quarter net profit.
Sentiment towards the bank was also helped by the conversion of its preferred shares in Morgan Stanley into common stock, which increased a stake in its Wall Street peer to 22 per cent.
Its shares outperformed to fall just 2.6 per cent over the week to Y382.
Toyota Motor, the world’s biggest carmaker by sales, said that the stronger yen had cut its fiscal first-quarter operating profit by Y50bn. Although it later raised its full-year net profit forecast by 40 per cent on Tuesday, its shares were down 3.6% on the week at Y3,040.
Honda Motor fell by 6.3% over the week after posting a sharp decline in second-quarter profit.
Korea’s Hyundai Motor sang by 13.2% as US carmakers warned of fragile demand as hopes of a strong economic rebound in the second half faded. Hyundai’s affiliate, Kia Motors , lost 6%.

European markets also suffered substantial losses for the week ended Aug 5.
By the end of the week the pan-European FTSEurofirst 300 index tumbled 9.90% to 975.02.
The Britain's FTSE 100 closed down 9.77% tat 5,246.99.
The Frence’ CAC 40 decreased by 10.70% to 3,280.50.
The Germany’ Xetra DAX fell by 12.89% to 6,257.50.
European markets also shed after ECB President Jean-Claude Trichet acknowledged a “particularly high” level of uncertainty said inflation expectations “must remain firmly anchored.” He said the ECB will offer banks additional cash as the region’s debt crisis spreads increasing pressure on policy makers to resume bond purchases.
The oil prices have been plummeting down on concerns over slowdown in economic recovery of US and Europe for all this week. Reports on US macroeconomic statistics have showed the worst figures during a long time and the approved legislation plan of cutting federal spending by $2.4 trillion triggered worries about prospects of the world's largest economy. Widened spread between Italian, Spain, French and Belgium bonds and German 10-year bonds fueled concerns about EU debt crisis.
On Friday the stocks exchanges began to rebound after news that the ECB is willing to buy Italian and Portugal bonds if Italy advances reforms.
Increased government borrowing costs sent Italian banks tumbling. Intesa Sanpaolo dropped 19.1% over the week and UniCredit shed 18.5%. The banks did manage a brief rally on Wednesday proceeding a political address by Silvio Berlusconi. The Italian PM said the nation's banks - having passed the stress tests – “are solid”, and noted that “Italy is well capitalized and can finance the economy”. However, investors remained unconvinced that Italy could avoid being drawn into the deepening eurozone debt crisis.
Fiat fell by 19.4% on a drop in domestic July car sales. Rising costs of raw materials and projections of slower growth in previously fast growing markets, such as China and Brazil, have weighed heavily on car manufacturers in Europe. Fiat Industrial, the Italian truck and tractor maker, was down 18.7%.
Italian phone company Telecom Italia defied trends this week, climbing 13.3% as its Brazilian division TIM Participacoes exceeded profit expectations and an Italian newspaper reported a possible takeover of mobile operator 3 Italia.
Veolia Environnement was the week’s biggest faller, plunging 29.4%. The French water company fell to a record low following a first-half loss and plans to halve its geographic reach. Concerns focused on the possibility that the company could cut pay-outs to shareholders.
Wacker Chemie, the German polysilicon maker, tumbled 20.5% after reporting lower-than-expected profits for the second quarter. The company warned of slower economic growth in the second half of the year and blamed high raw material costs.
German retailer Metro suffered a loss of 15.6%. The company said second-quarter income had missed expectations and risks to its 2011 profit target had grown. It cited a faltering global economic recovery and fretful shoppers following higher food prices.

"Blue Chips" suffered the worst weekly losses since 2008.
At the end of the week the S&P 500 collapsed 7.19% to 1,199.38.
NASDAQ Composite closed the week lower by 3.58% at 2,756.38.
Dow Jones Industrial Average tumbled 5.75% to 12,143.24.
The markets have been plummeting down on concerns over slowdown in economic recovery of US and Europe for all this week.
The Wall Street suffered Thursday their worst day since the 2008 financial crisis. On Thursday the US stock equities collapsed 4%-5%, erasing their gains for the year. The Dow Jones industrial average plunged more than 500 points.
Earlier this week, U.S. markets were down amid the "debt ceiling drama". The Senate and President Obama approved the legislation plan to hike the U.S. debt limit at the last minute. If the deal hadn’t been passed by Aug 2, the US might have been faced a technical default and lost its AAA debt rating immediately. However, the risk of downgrade remained real.
The approved legislation plan of cutting federal spending by $2.4 trillion triggered worries about prospects of the world's largest economy.
At the last day of the week the markets were supported by strong US labor market statistics and reports that the ECB is willing to buy Italian and Portugal bonds if Italy advances reforms.
Market participants also concerned as reports on US macroeconomic statistics have showed the worst figures during a long time, including weak July data on manufacturing and non-manufacturing indices from ISM.
At the last day of the week the markets were supported by strong US labor market statistics and reports that the ECB is willing to buy Italian and Portugal bonds if Italy advances reforms.
As for corporate news, financial, basic materials and industrial goods S&P groups were hit the hardest.
Bank of America-Merrill Lynch fell by 15.9% for the week, while Citigroup lost 12.8% over the week.
But the volatile session still left the Nasdaq Composite down 0.9 per cent to 2532.41, compounding a heavy week of losses which saw it hit its lowest point since November 2010.
The Dow Jones Industrial Average managed to edge up 0.5 per cent on Friday to 11,444.61 but lost 5.8 per cent for the week. Energy shares were among the biggest losers on Friday.
Sunoco, the petroleum group, shed 5.2%, Alpha Natural Resource, the coal supplier, dropped 2.8% and AK Steel sang 1% over the week amid missing quarterly reports.
The week’s top gainer was Priceline.com, which added 10.6%.
Kraft Foods Inc. increased 3.4% for the week, the biggest gainer among companies of Dow Jones Industrial. The food maker said it would split into two separate publicly traded companies: a snacks business and a North American grocery business.

08.08.2011 07:25

Board of orders:

Market Focus

  • The eurozone started the third quarter on a solid footing, according to PMI survey data
  • Earnings Season in U.S.: Major Reports of the Week
  • German private sector output growth slowed for the second month running in July
  • ECB's Mersch says as conditions normalise, it is unlikely that uncoventional policies will remain necessary
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