The main European stock markets were down in the week from the 7th to the 11th of July, 2014 (Milan -4.4%, London -2.6%, Frankfurt -3.4%, Paris -3.4%, Madrid -4.3%), trimming the 2014 year-to-date performance of benchmark index Stoxx 600 to +2.6%. Bank stocks underperformed (index -4.1% during the week), in anticipation of European tests on asset quality (due July 17) and following the sell-off of Portuguese Banco Espirito Santo (down 37% in the week after delaying payment to short term debt). Moreover, European Industrial Production data for May disappointed (-1.8% yoy for Germany and Italy, against expectations of +0% and +1.5%, respectively).
Auto & Parts stocks traded in line with the market (sector index -3.9%, +4.9% the YTD performance). German OEMs BMW and Volkswagen held an upbeat Investor Day in China which revolved around the growth prospects of the local market: positive trend in H1 2014 and volumes expected to grow in the double digits for the next 10 years.
Pirelli shares closed the week at 11.71€ (-3.1%, in line with tyre peers) with limited volumes (1.5 million shares on average per day, against a 3-month average of 2.4 million). Consensus target price is at 12.92€/share with 85% of analysts advising to Buy or Hold the shares.