London Stocks End Lower; Miners, Oil & Gas Drag

FTSE 100 ends 0.9% lower at 5513.69. Miners and oil & gas stocks are the biggest decliners, with Fresnillo down 5% and Tullow Oil off 3.4%. Banks do OK, though, shrugging off the Moody’s downgrades; Lloyds and HSBC both +0.6%. “Today actually feels like one of the most ‘normal’ days we have had recently – mining stocks have been the main drag…as concern remains about the lack of pace for the global recovery and investors have been giving their worries about Europe a rest for once,” says IG Index. “But the selloff in stock markets over the last couple of days has of course put a serious dent in the June recovery that was happily grinding its way higher, and has probably dealt a bigger blow to investor sentiment.”

Frankfurt Stocks Close Firmly Lower

DAX ends 1.3% lower at 6263.25, staying in the red for the entire session amid ongoing concerns about the economy and the debt crisis. Data showing that Germany’s Ifo index fell more than expected in June weigh. “Investors fear the situation of businesses will worsen significantly in the coming weeks and months,” says a trader. Cyclical shares are particularly weak in Frankfurt, with BASF ending down 4% and Infineon off 3.6%. Defensives, in contrast, are in demand with Deutsche Telekom +1.6% and E.ON +0.8%. Lufthansa ends +1% amid declining oil prices. Monday’s economic agenda includes Germany’s GfK consumer climate indicator at 0610 GMT.

Zurich Stocks Close Slightly Lower

SMI ends 0.4% lower at 5989.33 as concern over prospects for the global economy weigh on cyclical stocks. Adecco ends down 2.9%, Holcim off 3.2%. Holcim is under added pressure after India’s anti-trust body imposed fines on it and other cement firms Thursday. Banks have largely recovered from opening losses following Moody’s downgrade of global banks, as analysts say the reassessment was slightly less negative than many investors feared. UBS ends flat, Credit Suisse down 0.6%. Next week, the focus will again be on the euro zone, while the Swiss KOF leading indicator is due Friday.

Amsterdam Stocks End Firmly Lower

AEX ends 1% lower at 298.76 as data disappoint, with Germany’s Ifo business confidence index hitting a 2-year low; ongoing worries about Spain also weigh. Air France-KLM is the biggest gainer in Amsterdam, +2.8% after news of job losses to further the company’s cost-cutting efforts. KPN loses 4.4% after America Movil extended its stake overnight to 20% from 8%. Monday, the data diary includes German GfK consumer confidence at 0610 GMT and US new home sales at 1400 GMT. The market also eyes the EU summit later in the week.

Nordic Stocks Finish Session Mixed

Nordic markets close mixed, after early gains on Wall Street but a weak reading from Germany’s Ifo business confidence index, which drops to a 2-year low. OMXN40 ends 0.1% higher at 934.09, OBX 1.9% lower at 354.77. Trading volumes in the Nordics are limited, with Stockholm and Helsinki closed for holidays. REC finishes 27% in arrears after the company announces a share issue of NOK1.3B.

Milan Stocks Close Slightly Lower

FTSE Mib closes 0.6% lower at 13,663 as weak data – a new low in Italian consumer confidence and a drop in Germany’s Ifo index – more than offset the ECB’s loosening of collateral rules. Some banks do well, with Monte dei Paschi di Siena ending 6.2% ahead; but cyclicals fall, with Ferragamo down 3.9% and Fiat Industrial off 3.6%. The mood is gloomy heading into the weekend, with the four-way EU leaders’ summit in Rome seen as a disappointment with nothing new or concrete announced, a Milan-based fund manager says.

Madrid Stocks Close Sharply Higher

IBEX-35 closes 1.5% higher at 6876.30, amid continued relief that Thursday’s independent assessments of Spanish banks’ needs came in better than expected. Friday’s news that the ECB plans to ease collateral standards for the sector also boosts market sentiment. Santander ends +1.1%, BBVA +0.9%. The yield on 10-year Spanish government bonds is down dramatically from earlier in the week, when it crossed 7% for the first time in the euro era. Next week, Spain’s formal request for European aid for its banking sector will be closely watched.

Brussels Stocks Close Slightly Lower

Bel-20 closes 0.8% lower at 2126, in line with other European bourses as data show Belgian consumer confidence falling for a fourth straight month and as concerns about the global economy weigh on miners and chemical companies. Solvay is the sharpest faller, finishing the session 5.9% in arrears.

Athens Stocks Close Firmly Lower

ASE ends 0.9% lower at 608.41. A local trader notes thin volumes, no conviction and lack of direction. Says mid-caps have outperformed, with some bargain-hunters in the market. “A pretty boring session overall, with no real news apart from the hospitalization of the finance minister and the prime minister.” Banks are mostly weaker, with Alpha Bank down 3.9% and EFG Eurobank off 5.8%. Piraeus Bank bucks the trend, up 3%. “With the new government now in place, a resumption of talks with the Troika is imminent. Note that the main change the government will ask for is likely to be a two-year extension to its fiscal targets, i.e. a 2.1% deficit-to-GDP ratio in 2016, rather than 2014, down from 9.3% in 2011,” says BNP Paribas.

Prague Stocks Close Slightly Lower

PX closes 0.3% lower at 899.6, dragged down by losses elsewhere in the region and core Europe. Euro zone issues, centered on debates about the bailout of the Spanish banking sector, will continue to weigh on Czech stocks next week, local traders say. Nearly all local blue chips end in the red: CEZ down 0.5%, Komercni Banka off 0.4%, Erste Group Bank 0.2% lower and NWR 1.1% adrift. Only Telefonica Czech and Philip Morris Czech gain, closing +0.1% and +0.3% respectively.

Budapest Stocks Close Sharply Lower

BUX closes 1.5% lower at 17,232.59, mirroring international trends after publication of unfavorable German business confidence data and on lingering disappointment over the US Federal Reserve’s announcement Wednesday. All Budapest stocks end the final trading day of the week with losses. OTP retreats 4.1%, with more modest losses for Magyar Telekom (-0.9%), MOL (-0.5%) and Richter (-0.1%).

StockMarketNews Research Team