Fear of recession weighs on investor sentiment
Eurostoxx 50: 2,378.64 (-33.65) Frankfurt DAX: 6,242.47 (-172.29) Paris CAC: 3,278.56 (-41.79):EUROPEAN STOCKS retreated, with the benchmark Stoxx Europe 600 Index posting its biggest weekly loss since November 2008, as a US jobs report failed to allay concern that the global economy is struggling.
“The markets want to see a solution that is sustainable in Europe,” said Markus Steinbeis, head of equity portfolio management at the Unterfoehring, Germany-based unit of Pioneer Investments KGmbH, which oversees about $221 billion globally. “The European Monetary Union is facing the risk of collapsing. The market is afraid of a recession. There’s a point where sentiment is collapsing and maybe this point is right now.”
RBS slumped 6.9 per cent to 28.2p after reporting a first-half net loss of £1.4 billion. That was wider than the £571 million loss estimated by five analysts surveyed by Bloomberg. The Edinburgh-based lender wrote down the value of its Greek debt holdings by £733 million, it said.
Allianz declined 4.5 per cent to €79.10, its lowest price since June 2010. The Munich-based insurer said second-quarter net income declined to €1 billion. That fell short of the €1.28 billion average estimate of 10 analysts surveyed by Bloomberg. Allianz wrote down its Greek debt by €326 million at the end of June. Logica tumbled 14 per cent to 88.6p for the worst performance in the Stoxx 600.
The Anglo-Dutch computer services provider reported first-half earnings that missed analysts’ estimates. Net income declined 14 per cent to £58.4 million in the first half as government customers in the Netherlands cut costs, the company said. That missed the £62.4 million-pound average estimate of analysts surveyed.
Securitas AB slid 10 per cent to 52.50 kronor, its largest decline since August 2006. The second-biggest guarding-services provider posted second-quarter net income of 368 million kronor, compared with 471 million kronor a year earlier. That missed the mean estimate in a Bloomberg survey of 419 million kronor. Delhaize, Rio Tinto Delhaize Group SA lost 3.5 per cent to €45.39 after the owner of the Food Lion supermarkets in the US reported earnings before interest and taxes that missed analysts’ estimates as store-remodelling costs and price cuts to revive US sales growth outpaced savings. – (Bloomberg)