The main European stock markets were down in the week from the 10th to the 14th of June 2013 (Milan -3.2%, London -1.6%, Frankfurt -1.5%, Paris -1.7%), bringing year-to-date performance to +4.1% (Stoxx 600 Europe index). Investor sentiment was affected by the Central Bank of Japan unexpectedly deciding to not strengthen the liquidity injection in the market ($620 bln per year), failing also to introduce new instruments to limit government bonds’ volatility. During the week, moreover, the World Bank downgraded its global outlook bringing 2013 growth to +2.2% (January estimate was +2.4%), lower than the 2.3% achieved in 2012. Expectations on emerging markets were lowered (China +7.7% vs previous 8.4%, Brazil +2.9% vs 3.4%, India +5.7% vs +6.1%), and the Eurozone is now expected to contract by 0.6%.
Auto & Parts stock retreated (sector index -2.8%), with the main auto OEMs down by more than 4% on average. At +8.3%, the sector is still the third best performer among European equities in 2013.
Tyre stocks outperformed the sector, thanks to May market data pointing to a possible recovery in the European replacement market and a still buoyant South American market.
Pirelli closes the week up +3.2% at 9.27€, with average daily volumes at 3.2 million shares (approximately +20% vs 1 month average). Consensus target price stood at 9.4€ with 82% of analysts with a positive view on the stock (“Buy” and “Hold”).