Stocks: Monday's review
Japanese stocks fell for a second day, with the Nikkei 225 (NKY) Stock Average dropping to its lowest in almost two and a half years, as exporters and banks tumbled amid speculation Greece may be nearing default.
Sony Corp., which gets 21 percent of its sales in Europe, fell 3.4 percent as the yen’s advance to a 10-year high against the euro dimmed the earnings outlook.
Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender by market value, declined 2.7 percent on concern Europe’s debt crisis will hurt the global financial system.
Sharp Corp. plunged 5 percent after Mizuho Securities Co. cut its target price on the maker of flat screens.European stocks slumped for a second day, dragging the benchmark regional gauge to its lowest level since July 2009, as speculation mounted that Germany is preparing for Greece to default.
BNP Paribas (BNP) SA, Societe Generale SA and Credit Agricole SA (ACA) tumbled at least 11 percent after two people with knowledge of the matter said Moody’s Investors Service may cut the banks’ ratings because of their Greek holdings. AXA SA (CS) and ING Groep NV (INGA) lost more than 8 percent as insurers posted the second biggest losses among 19 industry groups on the Stoxx Europe 600 Index.
Officials in Chancellor Angela Merkel’s government in Germany are debating how to shore up the country’s banks should Greece fail to meet the budget-cutting terms of its aid package, three coalition officials said on Sept. 9. BNP Paribas, Societe Generale and Credit Agricole may have their ratings cut by Moody’s this week because of their holdings of the Mediterranean nation’s debt, two people with knowledge of the matter said.
Prime Minister George Papandreou, vowing to avoid a default and keep Greece in the euro, approved new measures yesterday to help plug a budget gap as resistance builds at home and in Europe to extending more aid to the European Union’s most- indebted nation.
Charter International Plc rallied 6.6 percent to 857 pence after Colfax Corp. (CFX)’s U.K. unit said the company agreed to buy the U.K. engineering business for about 1.53 billion pounds ($2.4 billion).U.S. stocks pared losses after the Financial Times reported that Italy was in talks with a Chinese investment firm to buy bonds, offsetting concern that Greece may default on its debt.
Chipmakers and banks in the Standard & Poor’s 500 Index rallied. NetLogic Microsystems Inc. (NETL) jumped 52 percent after Broadcom Corp. (BRCM) agreed to buy the semiconductor company for $3.7 billion in cash.
Stocks rebounded as the Financial Times said Italian officials are trying to convince China to purchase its bonds, without identifying its sources. An Italian government official, who declined to be identified, told that Italian officials have held talks with Chinese counterparts about potential investments in the euro region’s third-largest economy.
The purchase of Italian bonds by China was not the focus of the talks, which took place in the past few weeks, the official said on condition of anonymity. A spokesman for Italian Finance Minister Giulio Tremonti declined to comment.