US stocks ended the week lower, due to the rebound in oil prices, the Federal Reserve warning of the risk of rising inflation, and analysts’ downgrading of financial stocks. Trading volume was thin, as US consumer confidence hit a 16-year low and a profit warning from United Parcel Service ignited fears of more corporate bad news to come. Companies also faced pressure from soaring fuel costs. This had prompted Dow Chemical Co, the biggest US chemicals manufacturer, to announce price increases by as much as 25 percent for its products. On the positive side, Nike Inc and Oracle Corp reported improvement in quarterly profits.

In Europe, pharmaceutical stocks were firm. This is being led by Shire, as following the launch of Vyvanse, which is to be used in the treatment of attention deficit hyperactivity disorder, analysts upgraded the stock. Banks such as UBS, Credit Agricole, and Deutsche Postbank dipped after analysts lowered recommendations on US financial shares. Barclays Bank announced a share placement plan. Analysts downgraded UK property stocks such as Land Securities and Liberty International.
 
Shares such as auto and tyre makers - Renault, BMW, Porsche and Michelin were among the biggest losers, as a result of high raw material prices, ongoing worries over the US economic outlook and the rising euro.

Japanese financial shares declined on concerns that bad loans might increase. Aiful, Japan's largest consumer-finance company measured by assets plummeted on news that it might go insolvent. Shares of Shimamura Co, a clothing store operator tumbled, after analysts cut its rating. Analysts were downgrading Toshiba Corp, over concerns of supply and demand imbalance in the NAND flash memory market. Honda Motor Co outperformed its peers with double-digit sales growth in May. The share prices of Nippon Steel Corp and JFE Holdings Inc dropped, after the sharp increase in iron ore prices. Sharp Corp was supported by news that the Ministry of Economy Trade and Industry plans to hand in a budget request to reinstate solar panel subsidies starting from April 2009.

In Hong Kong, technology share Foxconn International Holdings dropped, following the sharp fall in Motorola’s market share in North America. Aluminum Corp of China was downgraded due to concerns over rising input costs and falling prices for its main product, alumina. Hong Kong Exchanges & Clearing was weak, as average daily market turnover was only HK$65 billion, which was insufficient to support current price valuation. China's CSI 300 Index gained on news that China Life Insurance Co had been buying “large quantities'' of open-end stock funds. The share price of Hutchison climbed after being upgraded by analysts. Standard Chartered Bank failed to hold despite it reported a stronger than expected 1H08 earnings.
 
The Taiwan central bank raised interest rates to curb inflation. Financial stocks, such as Cathay Financial were weak despite the government allowing the sector to invest in the Chinese market. China's Datang is planning to invest with Mediatek in a chip company targeting China's homegrown TD-SCDMA 3G technology. Taiwan brokerages including Yuanta Group, Ta Ching Securities and President Securities are all planning to increase their capital as they look for investment opportunities in China.
 
In Korea, exporters and banks such as Hyundai Motor, Samsung Electronics and Kookmin Bank retreated after a major US investment bank downgraded the sector. LG Electronics was soft after being downgraded by analysts over concerns that handset shipments would likely fall short of their second quarter guidance. SK Telecom climbed on the back of media reports that Virgin Mobile USA was about to acquire Helio, the US mobile arm of SK Telecom.