Europe stocks post biggest weekly drop since July

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LONDON, Mar 19 (Bloomberg): European stocks tumbled by the most in eight months this week after Japan's March 11 earthquake damaged cooling systems at an atomic power plant, causing the worst nuclear accident since Chernobyl. Swiss Reinsurance Co. and Munich Re led insurers lower for a second week amid concern the industry may face claims of as much as 2.8 trillion yen (US$35 billion) from the Asian nation's biggest quake on record. E.ON AG and RWE AG sank more than 9 per cent after the crisis prompted Germany to reconsider extending the life of its nuclear plants. Areva SA, the world's largest builder of atomic reactors, slid the most since 2001. The Stoxx Europe 600 Index plunged 2.80 per cent to 267.63 this past week, the biggest drop since July, as the temblor and ensuing tsunami killed more than 6,000 people and caused radioactive vapor to leak from the Fukushima Dai-Ichi nuclear power station. The gauge has fallen for four straight weeks, the longest losing streak since May. The nuclear crisis was a "critical issue for the market," said Mike Lenhoff, London-based chief strategist at Brewin Dolphin Securities Ltd., whose parent company oversees about $33 billion. "Given the lead role that Asia and China have played in the economic recovery, the overall impact was clearly very unwelcome and tragic." Stocks pared their weekly losses as Group of Seven nations jointly intervened in the foreign-exchange market Friday for the first time in more than a decade after the yen soared to a post-World War II high against the dollar, threatening Japan's recovery. The country's central bank added 38 trillion yen to the financial system this week as policy makers sought to support the world's third-largest economy.