European stocks fell this week, as a slump in commodities shares offset a record one-day rally by the Dow Jones STOXX 600 Index after central banks and regulators stepped in to shore up financial markets.
The benchmark index was headed for its steepest weekly retreat since July 2002, before financial shares on Friday rallied the most in at least 17 years after the US government moved to cleanse banks of troubled assets and international regulators banned investors from betting the value of banking stocks will fall.
“I can’t recall ever seeing a roller-coaster market like this before,” said Carsten Klude, an investment strategist at M.M. Warburg & Co in Hamburg, which oversees the equivalent of US$25 billion. “The whole financial system in the US has gotten out of joint this week.”
The Dow Jones STOXX 600 Index fell 0.8 percent this week even after the 8.3 percent rally on Friday, the biggest since data for the index begins in 1987. The index had slumped 8.4 percent between Sept. 12 and Thursday. The UK’s FTSE 100 Index posted a record advance on Friday and Russia’s RTS Index jumped 22 percent after a two-day suspension and Russian President Dmitry Medvedev’s pledge of US$20 billion to prop up the market.
National benchmark indexes declined in 13 of the 18 western European markets. France’s CAC 40 slipped 0.2 percent. The UK’s FTSE 100 retreated 2 percent, while Germany’s DAX fell 0.7 percent.