Industry Sector Weekly by Lloyds TSB

Once again it has been a roller coaster week for European equities, rocked early on by news of continuing tensions between North and South Korea and Spain’s decision to merge four local lenders and rescue an additional fifth, reigniting fears of eurozone contagion. A roller coaster week in the equities market

Once again it has been a roller coaster week for European equities, rocked early on by news of continuing tensions between North and South Korea and Spain’s decision to merge four local lenders and rescue an additional fifth, reigniting fears of eurozone contagion. Recovery came later in the week with the market finding support after statements from China’s foreign exchange regulator indicated continued appetite for Euro denominated assets. Sentiment coming out of the US government was that proposed legislation requiring the spin off of commercial bank derivative operations may be dropped from the Financial Reform Bill, helped lift the market as bank shares gained. The basic resource sector was a key winner this week as unconfirmed rumours that Australia might increase the hurdle rate on its mining tax from 6% to 12%, improving the outlook for profits and a growing sense that China will delay raising interest rates, bolstering commodities demand.

Full Report