Stocks: Weekly review
Asian stocks fell to their worst weekly losses in 10 months but traumatic and volatile days for markets ended on a more upbeat note after some progress in containing Japan’s nuclear crisis and intervention to weaken the yen.
Japanese stocks had their worst trading week since October 2008. They fell 10.2 per cent, wiping $350bn off the value of Tokyo equities and entering bear market territory on Tuesday.
But the Nikkei 225 Average rallied 2.7 per cent to 9,2006.75 on Friday as the Group of Seven leading industrial nations acted together to weaken the yen.
The drop marked its biggest weekly slide since the 2008 global financial crisis. Japanese stocks suffered their worst two-day slide on Monday and Tuesday since the 1987 global stock market crash. That followed a 9.0 magnitude earthquake and devastating tsunami on Friday that killed thousands and crippled the Fukushima Daiichi nuclear power complex about 240 km (150 miles) north of Tokyo.
Tokyo Electric Power surged 19 percent to 948 yen, paring its weekly loss to 55 percent.
Japan’s oil explorers had the largest gains on Friday as investors looked to sectors best-placed to take advantage of the nuclear power woes.
European stocks tumbled by the most in eight months this week after Japan’s March 11 earthquake damaged cooling systems at an atomic power plant, causing the worst nuclear accident since Chernobyl.
Swiss Reinsurance Co. and Munich Re led insurers lower for a second week amid concern the industry may face claims of as much as 2.8 trillion yen ($35 billion) from the Asian nation’s biggest quake on record. E.ON AG and RWE AG sank more than 9 percent after the crisis prompted Germany to reconsider extending the life of its nuclear plants. Areva SA, the world’s largest builder of atomic reactors, slid the most since 2001.
Over the week, the pan-European FTSEurofirst 300 index fell 3 percent, a fourth week of declines, the longest losing streak in more than a year.
Stocks pared their weekly losses after Group of Seven nations jointly intervened in the foreign-exchange market today for the first time in more than a decade after the yen soared to a post-World War II high against the dollar, threatening Japan’s recovery. The country’s central bank added 38 trillion yen to the financial system this week as policy makers sought to support the world’s third-largest economy.
Financial stocks climbed higher after the Federal Reserve cleared the way for banks to raise their dividends, while in the wider markets a turbulent week on Wall Street ended on a high note due to easing geopolitical tensions.
JPMorgan Chase and Wells Fargo were among those to raise their dividend following a decision by the Fed to relax the rules on banks returning cash to their shareholders.
US equities continued to rebound from the heavy losses seen earlier in the week, lifted by news that Libya had announced an “immediate ceasefire” in its offensive against rebels.
Industrial and commodity stocks saw the strongest gains after financials, helped by the easing geo-political tensions.