STOCKS weekly review (17.06 – 21.06.2013) EUROPE

European stocks posted the biggest weekly slide in 13 months as Federal Reserve Chairman Ben S. Bernanke said the central bank may pare bond purchases, Greek wrangling threatened to fracture the government and China’s cash crunch worsened.

The benchmark Stoxx Europe 600 Index plummeted 3.7% to 280.4 last week as all 19 industry groups dropped. The gauge has declined for five straight weeks, the longest streak of losses since June 2011.

Greece has moved back into the spotlight, with talks among the government’s coalition leaders stoking concerns over the durability of the government due to controversy surrounding the closure of state-run broadcaster ERT.

Greece’s Democratic Left party said it would pull out of the coalition government amid disagreement with Prime Minister Antonis Samaras’ abrupt decision to close the state broadcaster, ERT, last week.

Adding to worries about Greece, the International Monetary Fund threatened to suspend aid payments to the struggling country, unless euro-zone leaders move to plug a gap of 3 billion to 4 billion euros ($4 billion to $5.3 billion) in the country’s rescue program. The report said the gap stemmed from central banks refusing to roll over Greek bonds and that Athens wasn’t to blame.

National benchmark indexes fell last week. The U.K.’s FTSE 100 dropped 3.1%, France’s CAC 40 lost 3.9%. Germany’s DAX Index declined 4.2%, the biggest slide in a year. Greece’s ASE plunged 9.7%.

Gauges of resources stocks and automakers tumbled the most. BHP Billiton and Rio Tinto, the world’s biggest mining companies, retreated 6.3% and 4%, respectively. Randgold Resources Ltd., a producer of the precious metal in Africa, and Fresnillo Plc, the world’s biggest primary silver producer, each tumbled the most since 2008. The shares sank 14% and 17%, respectively, as gold and silver touched the lowest levels since 2010.

PSA Peugeot Citroen, France’s biggest carmaker, declined 12% and Daimler AG lost 8.7%.

Meanwhile, Nokia Oyj rallied 8.9% after the Wall Street Journal reported the company held talks to sell its mobile-phone business to Microsoft Corp. The discussions failed amid concern over the price and Nokia’s market share, the newspaper said, citing people familiar with the matter. The Financial Times reported that China’s Huawei Technologies Co. may be interested in buying Nokia. But Huawei said it has no plans to acquire the company.

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