Sun, Apr 07, 2013 - Page 15 News List

European equities decline on signs of slower US growth

Bloomberg

European stocks posted their biggest weekly decline since November, as reports signaled that the economic rebound in the US has slowed, while the European Central Bank (ECB) said risks remain to the eurozone’s recovery.

Vodafone Group PLC lost 2.1 percent after Verizon Communications Inc denied that it has considered buying the mobile-phone operator. Kazakhmys PLC and Evraz PLC slumped more than 7 percent this week, leading a gauge of mining stocks to its longest streak of losses in 13 years.

The STOXX Europe 600 Index fell 2.3 percent in the four-day week following the Easter holiday, completing its longest stretch of losses in more than 10 months. The slump pared the gauge’s advance so far this year to 2.7 percent. The STOXX 600 had gained as much as 6.7 percent amid speculation that central banks would continue to provide monetary stimulus.

“Markets are going to be vulnerable to bad news from the States,” Philip Saunders, who helps oversee about US$105 billion at Investec Asset Management in London, told Francine Lacqua on Bloomberg Television.

“Growth, or the lack of it in Europe, is the big issue. We’re in a depression and that’s not going to go away. The Japanese authorities have finally gotten round to dealing with it after 20 years. Let’s hope it doesn’t take that long in Europe,” he said.

Bank of Japan Governor Haruhiko Kuroda increased the lender’s monthly bond purchases to ¥7 trillion (US$72 billion) on Thursday. The central bank would double its monetary base within two years, according to a statement issued after Kuroda’s first meeting in charge of the institution.

National benchmark indexes still fell in all 18 Western European markets this week. The UK’s FTSE 100 dropped 2.5 percent, while France’s CAC 40 and Germany’s DAX retreated 1.8 percent. The stock market in Cyprus declined 2.5 percent after opening for the first time since March 15.

European stocks extended losses on Friday as a US Department of Labor report showed the US economy created fewer jobs last month than economists’ had forecast. Payrolls grew by 88,000 workers last month, their smallest increase in nine months. The median economist estimate in a Bloomberg survey had called for net hiring to climb by 190,000.

In Europe, ECB President Mario Draghi said that risks remain to the economic recovery in the second half of this year. The ECB left its benchmark interest rate at a record low of 0.75 percent on Thursday, matching most economist estimates.

This story has been viewed 1579 times.
TOP top