NEWS / Foreign Exchange

Europe bourses hurt by euro's gain vs greenback

LONDON: European stocks had their biggest weekly drop in more than two months as the dollar slumped against the euro and the pound. DaimlerChrysler AG and ING Groep NV led a slide by companies that rely on the US for sales.
???The dollar??™s decline is a pretty big factor and is a negative for the market,??™??™ said Job Curtis, who manages about $2.2bn at Henderson Global Investors in London. ???A lot of companies generate a significant amount of profit in dollars.??™??™
European companies get a fifth of their sales from the US.
Royal BAM Groep NV lost more than any other stock after the biggest Dutch builder cut its full-year forecast. Credit Agricole SA was Europe??™s third-worst performer, falling after France??™s second-largest bank by assets posted its smallest quarterly profit increase in almost three years.
The Dow Jones Stoxx 600 Index lost 0.6% to 355.98 this week. That was the worst performance since the week ended September 8. The Stoxx 50 declined 1.1%, while the Euro Stoxx 50, a gauge for the 12 nations using the euro, fell 0.8%.
Speculation that mergers and acquisitions will increase limited the losses. London Stock Exchange Plc led European exchange operators higher after Nasdaq Stock Market Inc renewed its bid for the company.
The dollar slid to $1.3082 against the euro, the lowest in 19 months, and to $1.9308 versus the pound, its weakest against the British currency in almost two years. It also slumped against the Swiss franc and other European currencies.
A weaker dollar makes European goods more expensive for consumers in the world??™s biggest economy, and reduces the value of earnings in the US currency when repatriated to Europe.
The dollar??™s decline ???is very bad news for most large companies in Europe,??™??™ said Jacques Porta, who helps oversee $180mn at Ofivalmo Patrimoine in Paris. ???It is a region that??™s highly dependent on exports.??™??™
DaimlerChrysler, the German carmaker that gets about 45% of sales in the US, dropped 3.4% on the week. Bayerische Motoren Werke AG, the world??™s largest maker of luxury cars, slid 3.5%. North America accounts for a quarter of BMW??™s sales.
ING, the biggest Dutch financial-services company, which depends on the Americas for about 40% of its revenue, dropped 3.8%. GlaxoSmithKline Plc slid 2.6%. Europe??™s largest drugmaker generates almost half of its sales in the US. ??“ Bloomberg