STOCKS weekly review (03. – 07.06.2013 EUROPE)

European stocks posted their third weekly drop amid concern that the Federal Reserve may reduce bond buying as soon as September and as the European Central Bank refrained from announcing new stimulus measures. National benchmark indexes declined in all of western Europe’s 18 markets except Iceland. The U.K.’s FTSE 100 Index lost 2.6%, Germany’s DAX slid 1.1% and France’s CAC 40 retreated 1.9%.

The Stoxx Europe 600 Index fell 3.4% to 295.4 last week, for the longest streak of weekly losses in two months.

The ECB kept its benchmark interest rate unchanged and refrained from announcing any new stimulus measures. President Mario Draghi said on June 6 policy makers discussed additional steps and stand ready to act if needed.

The ECB President Mario Draghi said ECB staff cuts its forecast for 2013 to a 0.6% fall in gross domestic product versus a March forecast of a 0.5% contraction. The staff, however, lifted the 2014 forecast to 1.1% growth from 1%.

The Bank of England left interest rates at a record low of 0.5%, and kept its asset-buying plan at 375 billion pounds ($579 billion).

Man Group plunged 18% after saying that the net-asset value of its A Man AHL Diversified fund decreased 6.1% last week. UBS AG lowered its recommendation on the shares to neutral from buy, saying that the fund’s recent performance will reduce Man’s earnings.

Aberdeen Asset Management tumbled 11%. Bank of America Corp.’s Merrill Lynch unit cut its rating on Scotland’s largest money manager to underperform, similar to a sell recommendation, from neutral, saying the stock’s price is unjustified given slowing earnings growth.

Hochtief AG, Germany’s largest construction company, dropped 6.9%. Berenberg Bank on June 7 cut its recommendation on the shares to hold from buy, citing a worsening outlook for Australian construction and mining.

Roche Holding AG, the world’s largest maker of cancer drugs, slid 3.2% after a study showed that its Avastin drug failed to extend the lives of patients with a type of brain cancer. The study found no advantage in using the drug as a first-line therapy against glioblastoma.

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