Eurostoxx 50: 2,159.28 (+3.66) Frankfurt DAX: 5,573.51 (+65.27) Paris CAC: 3,031.08 (+14.54)IT WAS a tumultuous week for Europe's banks with debt downgrades and rogue traders making an unwelcome return, but the announcement of co-ordinated action from five major central banks put the main lenders back in recovery mode.
The first half of the week saw the sector mired in concerns over slowing global growth and euro zone debt holdings – the main factor behind Wednesday’s downgrades of the long-term debt ratings of Société Générale and Crédit Agricole by Moody’s.
Yesterday’s session began to look like a triple whammy for the region’s banks after Swiss group UBS revealed a $2 billion trading loss, the result of a rogue trader in its London office.
The surprise announcement, however, that the European Central Bank, along with the Federal Reserve, Bank of England, Bank of Japan and Swiss National Bank, was to conduct a number of three-month operations to provide banks with dollar liquidity until the end of the year helped calm investors’ nerves.
While SocGen ended 8.6 per cent higher on the week at €18.96, Crédit Agricole finished 8.9 per cent down on the week at €4.92. BNP Paribas remained 5.4 per cent lower on the week at €28.20. BNP escaped downgrade by Moody’s but the agency left the bank’s debt on ratings watch with a negative view.
UBS was also unable to hit positive territory for the week, in spite of yesterday’s creditable performance, which added 6.3 per cent. Moody’s was also back in action on Friday, putting UBS on review for a possible downgrade, citing weakness in risk management. Over the week, the shares were down 1.8 per cent to SFr10.36.
Among the other notable performances in the sector, Italy’s Intesa Sanpaolo climbed 6.3 per cent over the week to €1.02, while Germany’s Commerzbank added 6 per cent to €1.77 and Credit Suisse jumped 12.1 per cent to SFr22.72.
Finmeccanica, the Italian aerospace and engineering group, climbed 8.3 per cent to €5.68 on Friday on reports that Alstom, the French engineer, was interested in AnsaldoBreda, Finmeccanica’s transportation division. Earlier in the week the stock was up on talk that US conglomerate GE was interested in the unit. – (Copyright The Financial Times Limited 2011
