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25.07.2011, 07:11
Stocks: Weekly review
All Asian markets, except Chinahis have closed week significant higher.
By the end of the week the Japan’ Nikkei 225 index added 1.58% to 10,132.10;
Hong Kong's Hang Seng rose by 2.60% to 22,444.80;
Australian’ S&P/ASX 200 climbed by 2.89% to 4,602.90;
China’ Shanghai Composite Index fell by 1.75% to 2,770.8.
Most Asian markets notched up weekly gains as investors were cheered by the latest attempts to address the sovereign debt crisis in Europe but Chinese shares were hampered by ongoing concerns over interest rates.
Esprit Holdings , the fashion group that makes much of its sales in Europe, climbed 11.5 per cent.
Cnooc , China’s biggest offshore oil producer by sales, fell 3.3 per cent over the week after agreeing to acquire OPTI Canada, the bankrupt Calgary-based oil sands producer, for $2.1bn including debt. In response, Nomura cut its rating on Cnooc.
Seoul stocks were broadly higher but its shipbuilders had a tough week after Hyundai Heavy Industries revealed a 10 per cent drop in second-quarter profit.
Shares in Hyundai Heavy fell 9.8 per cent by the week. Rivals also fell with Samsung Heavy Industries down 5 per cent and Daewoo Shipbuilding & Marine Engineering off 3.9 per cent.
LG Display , the world’s second-largest flat screen maker by sales, fell 3.6 per cent during the last two sessions of the week after its second-quarter net profit tumbled 96 per cent from a year earlier, forcing the company to cut 2011 capital expenditure by 18 per cent.
Tokyo’s Nikkei 225 Average climbed 1.6 per cent to 10,132.11 on the week, thanks to a robust performance from its banking sector. Mitsubishi UFJ Financial Group climbed 3.6 per cent.
The major European market also closed the week in green zone
The markets received support from reduced woes about the EU sovereign-debt contagion an yesterday EU leaders agreed on a second rescue package for Greece.
At an emergency summit in Brussels EU leaders reached an agreement on a solution to the debt crisis of the euro zone.
This agreement provides Greek debt restructuring deal and an expanding of size and rights of the existing mechanism of the European Financial Stability Facility. The Greek financing package will consist of 109 billion euros from the euro region and the International Monetary Fund.
But European Union officials said that the contain of Greece’s debt crisis won’t be enough to solve all problems in eurozone. Fitch Ratings said the part of the aid plan related to private-sector participation will constitute a “restricted default.”
Many of the banks that had been among the heaviest sold stocks in recent weeks were higher over the week: National Bank of Greece soared by 27.6%, Italian Intesa Sanpaolo and UniCredit rose by 10.8% and 9.1%, Spanish and Bankinter Bankinter climbed by 14.6% and 8.3% respectively, the German Commerzbank gained by 12.8%, Belgian Dexia surged 19% franzuzky Crédit Agricole grew by 11.3%.
It was a tough week for Swedish household appliance maker Electrolux, which warned on Tuesday that profits would be hit by weak demand and rising raw materials costs. Its shares lost 16.6 per cent over the week .
Ericsson, the Swedish mobile phone and networks group, fell by 7 per cent after Thursday’s second-quarter earnings announcement disappointed. Rival Nokia, however, rose 5.1 per cent over the week after it made reassuring comments about its alliance with Microsoft, which overshadowed its loss of share in the smartphone market.
EADS and some of its suppliers rose this week after American Airlines signed a multibillion-dollar order for 460 new aircraft to replace its ageing fleet.
"Blue Chips" finished weekly trading in positive
At the end of the week S&P 500 gained by 2.20% to 1,345.10;
NASDAQ Composite soared by 2.47% to 2,856.66;
Dow Jones Industrial Average climbed by 1.61% to 12,695.80, despite its decline on Friday.
Senate defeats House "Cut, Cap and Balance" budget plan. Senators voted 51-46. Sen Reid said the debt agreement is "not close" and no more Senate votes until Monday PM.
This week the U.S. markets moved on the uncertainty about the ongoing U.S. debt ceiling drama and debt problems of Greece in Europe. The earnings season also had a significant impact on the markets.
US equities were struggling for direction on Friday, but were set for solid weekly gains as the second quarter earnings season heated up, led by stellar results from Apple whose stock hit a record.
The S&P 500 was trading up 0.1 per cent at 1,344.40 at midday in New York and was on course for a weekly rise of 2.1 per cent.
The Nasdaq Composite was up 0.5 per cent at 2,849.19 with a weekly gain of 2.1 per cent.
Overall, S&P 500 earnings growth in the second quarter is set to rise 9.2 per cent year-on-year, up from a forecast of 7.1 per cent at the start of this week, according to FactSet. That sets the S&P up for its first single-digit earnings gain after six quarters of double-digit results.
So far this earnings season, 127 companies have reported their results with 84 beating estimates, a little higher than the run rate in prior quarters, and with 16 missing estimates, said John Butters, senior analyst at FactSet.
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