European stocks post their biggest weekly loss since mid-2011
* FTSEurofirst 300 down 2.6 pct; weekly loss of 5.9 pct * $524 bln wiped off STOXX 600 companies this week * Greek stocks sink 20 pct in week on political turmoil * Pictet bearish on euro zone stocks for 2015 By Blaise Robinson PARIS, Dec 12 (Reuters) - European shares tumbled on Friday and posted their biggest weekly loss since mid-2011 as a relentless slide in crude oil prices pounded the European energy sector. The broad STOXX Europe 600 index has lost 5.8 percent during the week, representing a wipeout in market capitalisation of roughly $524 billion, more the size of Norway's annual GDP. "This is a bloodbath. After such a negative week, there's not even a rebound into the close. The fact that oil can't find a floor is spooking market players," Saxo Bank trader Pierre Martin said. Oil fell to fresh lows not seen since mid-2009 on Friday with Brent crude slipping below $62 a barrel while U.S. crude fell below $58 on mounting worries over a global supply glut and weak demand. Saipem dropped 5.6 percent on Friday, hitting a 10-year low, while Royal Dutch Shell lost 3 percent, and Repsol retreated by 6 percent. Crude has dropped nearly 50 percent since June, forcing a number of European oil services companies including Seadrill and Fugro to scrap dividends as oil majors have accelerated cost-cutting. The STOXX oil and gas index, losing 3.6 percent on Friday, has plummeted 30 percent since June. The sell-off has erased roughly $300 billion from market capitalisation of the sector. "We're reaching a point where there's a risk of seeing corporate and sovereign defaults in energy-producing countries, which could revive global systemic risks," said Christophe Donay, head of strategy at Pictet, which has $441 billion in assets under management and custody. "I wouldn't be surprised to see the IMF helping some of the oil-producing countries next year ... The key for asset managers for 2015 is really to diversify and hedge portfolios." Pictet has recently sold all euro zone stocks in its portfolios amid doubts about the European Central Bank's ability to revive the region's economic growth, Donay said. The FTSEurofirst 300 index of top European shares ended 2.6 percent lower on Friday at 1,321.73 points, wiping off nearly all its gains of 2014. The benchmark index is now only up 0.4 percent in 2014. Shares in companies with a strong exposure to Russia also took a beating on Friday as the Russian rouble dropped to a new low of almost 58 to the dollar. The rouble has hemorrhaged more than 40 percent against the dollar since the beginning of the year, hurt by the slide in oil and risk aversion to Russian assets fuelled by Russia's stand-off with the West over the crisis in Ukraine. For Saxo Bank analysts, there's a risk that Russia could default on its debt at some point in 2015. "There is a perfect storm brewing for the Russian economy that could either end with government-owned companies or with the government itself selectively moving into a default," Saxo CIO Steen Jacobsen wrote in a note. Shares in Austrian lender Raiffeisen Bank International , which relies heavily on Russia for profits, slid 8.5 percent, while Danish brewer Carlsberg, which has a large exposure to the country, fell 2.7 percent. Greece's political crisis also weighed on market sentiment during the week, with Athens's ATG stock index plummeting 20 percent since last Friday. Investors have been rattled by a decision by the Greek government to bring forward to next week a presidential vote that will force nearly two dozen independent lawmakers to decide whether to side with Prime Minister Antonis Samaras' pro-bailout cabinet, or with leftist radicals who have pledged to tear up the bailout. Failure to elect a president would trigger early elections, which opinion polls now show Syriza is likely to win. Europe bourses in 2014: link.reuters.com/pap87v Asset performance in 2014: link.reuters.com/gap87v Today's European research round-up (Additional reporting by Annabella Nielsen; Editing by Mark Heinrich)
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