By Sarah Jones
source:businessweek.com
European stocks posted their first weekly drop in more than a month, after disappointing U.S. housing data and a surge in the cost to protect from a Greek default reignited concern about the global economic recovery.
BP Plc led energy companies lower, tumbling 15 percent to a 14-year low. Piraeus Bank SA and Alpha Bank AE paced a retreat by bank stocks, both dropping 10 percent in Athens. BHP Billiton Ltd. and Rio Tinto Group lost more than 3 percent after the appointment of a new Australian Prime Minister failed to allay concerns about the government’s proposed mining tax.
The Stoxx Europe 600 Index dropped 2.8 percent to 248.33, snapping four straight weeks of gains, as all 19 industry groups fell. The gauge has fallen 8.8 percent from this year’s high on April 15 amid concern about the impact of Europe’s debt crisis.
“It is possible that the market situation will worsen as the sovereign debt crisis spreads to other asset classes,” said Franck Dixmier, chief investment officer for Allianz Global Investors Investments Europe, which oversees about 110 billion euros ($136 billion). “In our view, there is every justification for the maintenance of high risk premiums in all asset classes at least until the end of the year.”
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