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Stocks: Monday’s review
Asian stocks dropped, with the regional benchmark index headed for the biggest two-day loss in seven weeks, after a Chinese central bank adviser forecast economic growth will slow further and on renewed concern that Greece may not meet its bailout targets.
Nikkei 225 8,508.32 -161.55 -1.86%
S&P/ASX 200 4,128.9 -70.22 -1.67%
Shanghai Composite 2,141.39 -27.24 -1.26%
Samsung Electronics Co., which gets 47 percent of its revenue in China and Europe, lost 2.4 percent in Seoul.
HSBC Holdings Plc, Europe’s largest bank, slumped 4.6 percent, its biggest drop since November.
BHP Billiton Ltd., the world’s No. 1 mining company, lost 2.6 percent in Sydney amid concern about global economic growth.
Gauges of volatility in Asia rose, reflecting increasing risk aversion among investors.
European stocks plunged the most in three months as concern grew that Greece will default and more Spanish regions will follow Valencia in seeking a bailout.
BNP Paribas SA (BNP) and HSBC Holdings Plc contributed the most to a selloff by a gauge of bank shares. BHP Billiton Ltd. (BHP), the world’s largest mining company, retreated 2.8 percent as a policy maker in China warned of slowing growth. Groupe Eurotunnel SA slumped 5.8 percent after earnings missed analysts’ estimates. Royal Philips Electronics NV, the biggest lighting company, advanced 5 percent as profit increased.
The Stoxx Europe 600 Index (SXXP) tumbled 2.5 percent to 251.75 the close of trading, the biggest retreat since April 10.
National benchmark indexes fell in all of the 18 western European markets.
FTSE 100 5,533.87 -117.90 -2.09%, CAC 40 3,101.53 -92.36 -2.89%, DAX 6,419.33 -210.69 -3.18%
Spanish and Italian lenders reversed their losses after regulators imposed bans on short selling. Banco Santander SA (SAN), Spain’s biggest bank, rose 1 percent to 4.23 euros, erasing a 5.1 percent decline. Bankia SA (BKIA) advanced 7.6 percent to 66.5 euro cents after earlier dropping as much as 9.6 percent. UniCredit SpA (UCG) closed 0.2 percent lower at 2.43 euros, after tumbling as much as 7.5 percent.
Italy’s market regulator, Consob, introduced a week-long ban on short selling shares of some banking and insurance companies because of the “recent performance of stock markets.” Spain banned short-selling of all shares for three months.
Eurotunnel (GET) plunged 5.8 percent to 5.92 euros, the largest decline in 10 months. The company that operates the rail tunnels beneath the English Channel reported first-half earnings before interest, taxes, depreciation and amortization of 205 million euros. That missed the average analyst estimate of 224 million euros in a Bloomberg survey.
Wereldhave NV (WHA) plummeted 13 percent to 45.58 euros, the largest drop since at least 1989. The Dutch real estate company abandoned its dividend targets for this year and next as Chief Executive Officer Hans Pars quit.
Philips climbed 5 percent to 17.03 euros, the biggest gain this year. The company reported an increase in second-quarter profit as Chief Executive Officer Frans van Houten extended a savings program into a second year.
Index retreated finished the session in negative territory. The pressure exerted on the indices concerns about worsening debt crisis in Europe and further economic slowdown in China.As noted earlier, the reason for the growth of these concerns were data on the GDP of Spain for the second quarter and reported that the IMF will not participate in further aid to Greece, as well as expectations of further slowing Chinese economy.
At the end of the 2nd quarter of 2012 the GDP of Spain fell by 0.4% qoq.
Against the backdrop of weak GDP data for the government bond yields in Spain has reached new record high 7.565%.
The growth yield of 10-year government bonds of Spain and 8% could result in the need for financial assistance from international lenders for the economy as a whole, not only for the banking sector.
Today, the media reported that the IMF has plans to stop paying finpomoschi Greece. This may result in default of the latter in the coming months.
Later, the IMF responded to these posts have stated their intention "to support Greece in overcoming economic difficulties." It was also stated that "the IMF mission will begin negotiations with the authorities on July 24. Will discuss the implementation of a program of economic conditions in Greece, required to obtain from the IMF financial assistance."
As for China, now the representative of China's central bank said it expected a further slowdown in the national economy.
As part of the index DOW closed most of the components in the red. The greatest growth at the close of such shares are shown: JPMorgan Chase & Co. (JPM, +1.64%), Caterpillar Inc. (CAT, +1.15%), General Electric (GE, +1.13%), Bank of America Corporation (BAC, 1.06%), The Home Depot, Inc. (HD, +0.62%). More than the rest fell into the share price Microsoft (MSFT, -2,81%), Kraft Foods Inc. (KFT, -2.77%).
Branches in the context of the S & P 500 all the sectors are in negative territory. Most other basic materials sector fell (-1.4%).
At the time of closure:
Dow 12,721.46 -101.11 -0.79%
Nasdaq 2,890.15 -35.15 -1.20%
S & P 500 1,350.51 -12.15 -0.89%
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