During the last five days European markets experienced the biggest drop for almost five months due to continuing worries in the financial sector. According to many investors, more difficult granting of financial loans could endanger new mergers and acquisitions which have been, from the beginning of the year, main driving force of stock markets. Within the financial sector stocks which registered biggest losses were Allianz (-8.3%) and UBS AG (-6%). In addition, mining sector was under pressure, where copper prices fell by 4.4% in one week. Construction of new houses in the USA declined by 6.6% during the last month.
From the individual stocks point of view, weakening affected mostly Anlgo American Plc (-14%) and Rio Tinto Group (-12%). Volvo AB and Scania AB announced worse than expected 2Q07 results and their shares subsequently fell during the week by 14% and 12% respectively. European index DJ Stoxx 600 lost 5.1% while narrower DJ Stoxx 50 by 4.9%. National indices lost in all eighteen Western Europe countries. German DAX declined by 5.4%, French CAC 40 by 5.3% and British FTSE 100 by 5.6%.