Tuesday June 23, 2009
LONDON: European stock exchanges suffered sharp falls on Monday on renewed fears for the health of the world economy.
The London FTSE 100 index shed 2.57 percent to close at 4,234.05 points while in Paris the CAC 40 lost 3.04 percent to finish at 3,123.25. The Frankfurt Dax fell 3.02 percent to 4,693.40 points.
Elsewhere in Europe there were declines of 2.53 percent in Madrid, 4.17 percent in Milan, 2.05 percent on the Swiss Market Index, 3.14 percent in Amsterdam and 2.47 percent in Brussels.
Late trading in Europe tracked a weak start to the day on Wall Street, where traders fretted over conflicting signals of a recovery in the world's most influential economy.
The Dow Jones Industrial Average at mid-day was down 1.65 percent at 8,399.16 points while the tech-dominant Nasdaq had shed 2.49 percent to reach 1,781.95.
Investors returned to the market Monday nervous ahead of a two-day Federal Reserve policy meeting beginning Tuesday.
They also had their eyes on the upcoming round of quarterly earnings reports and prospects for financial and other reforms.
But the mood was especially dampened by a grim outlook from the World Bank and declining commodity prices led by oil.
"The bulls are losing momentum on Wall Street," said Joseph Hargett of Schaeffer's Investment Research.
He said investors had "little to cheer about" heading into the market Monday, especially with a decision on US monetary policy due out of the Federal Open Market Committee.
The Federal Reserve's comments after the meeting are likely to offer clues on the timing and strength of an economic recovery.
"The lack of conviction right now is rooted in a wait-and-see mentality," said Patrick O'Hare of Briefing.com.
The World Bank meanwhile slashed its outlook for momentum in developing nations, estimating growth at a meagre 1.2 percent this year while warning more measures were needed for a recovery to take hold.
The forecast amounts to steep drops from the previous two years, with developing countries having seen 8.1 percent growth in 2007 and a 5.9 percent expansion in 2008.
European traders took little apparent comfort from a survey showing that firms in Germany, the eurozone's largest economy, were getting over the recession blues and expecting a stabilisation after the turmoil of recent months.
The Ifo institute's business climate index for June rose for a third straight month to reach 85.9 points, well ahead of market expectations for 85.3 points and up from a revised 84.3 points in May.
"The market has seen enough morale indicators," one trader told Dow Jones Newswires. "Now we want results."
In Frankfurt companies that depend heavily on macroeconomic factors were under pressure.
Steel maker ThyssenKrupp fell 5.31 percent to 16.95 euros while auto manufacturers Volkswagen and BMW declined 2.03 percent to 219.45 euros and 4.05 percent to 25.80 euros respectively.
Flag carrier Lufthansa shed 2.73 percent to finish at 8.55 euros after disclosing that it would have to slash costs further if it wanted to turn a profit this year.
In Paris, according to Jean-Bernard Parenti of SwissLife Gestion Privee, "investors took profits in sectors that had been gaining, such as automobiles and mines."
Auto maker Renault plunged 7.86 percent to 24.90 euros after Standard and Poor's lowered its long-term debt rating to BB -- speculative grade -- from BBB-minus.
Elsewhere oil companies suffered from a slide in crude prices. Total fell 3.32 percent to 37.88 euros and Vallourec 1.90 percent to 84.96 euros.
(AFP)
LONDON: European stock exchanges suffered sharp falls on Monday on renewed fears for the health of the world economy.
The London FTSE 100 index shed 2.57 percent to close at 4,234.05 points while in Paris the CAC 40 lost 3.04 percent to finish at 3,123.25. The Frankfurt Dax fell 3.02 percent to 4,693.40 points.
Elsewhere in Europe there were declines of 2.53 percent in Madrid, 4.17 percent in Milan, 2.05 percent on the Swiss Market Index, 3.14 percent in Amsterdam and 2.47 percent in Brussels.
Late trading in Europe tracked a weak start to the day on Wall Street, where traders fretted over conflicting signals of a recovery in the world's most influential economy.
The Dow Jones Industrial Average at mid-day was down 1.65 percent at 8,399.16 points while the tech-dominant Nasdaq had shed 2.49 percent to reach 1,781.95.
Investors returned to the market Monday nervous ahead of a two-day Federal Reserve policy meeting beginning Tuesday.
They also had their eyes on the upcoming round of quarterly earnings reports and prospects for financial and other reforms.
But the mood was especially dampened by a grim outlook from the World Bank and declining commodity prices led by oil.
"The bulls are losing momentum on Wall Street," said Joseph Hargett of Schaeffer's Investment Research.
He said investors had "little to cheer about" heading into the market Monday, especially with a decision on US monetary policy due out of the Federal Open Market Committee.
The Federal Reserve's comments after the meeting are likely to offer clues on the timing and strength of an economic recovery.
"The lack of conviction right now is rooted in a wait-and-see mentality," said Patrick O'Hare of Briefing.com.
The World Bank meanwhile slashed its outlook for momentum in developing nations, estimating growth at a meagre 1.2 percent this year while warning more measures were needed for a recovery to take hold.
The forecast amounts to steep drops from the previous two years, with developing countries having seen 8.1 percent growth in 2007 and a 5.9 percent expansion in 2008.
European traders took little apparent comfort from a survey showing that firms in Germany, the eurozone's largest economy, were getting over the recession blues and expecting a stabilisation after the turmoil of recent months.
The Ifo institute's business climate index for June rose for a third straight month to reach 85.9 points, well ahead of market expectations for 85.3 points and up from a revised 84.3 points in May.
"The market has seen enough morale indicators," one trader told Dow Jones Newswires. "Now we want results."
In Frankfurt companies that depend heavily on macroeconomic factors were under pressure.
Steel maker ThyssenKrupp fell 5.31 percent to 16.95 euros while auto manufacturers Volkswagen and BMW declined 2.03 percent to 219.45 euros and 4.05 percent to 25.80 euros respectively.
Flag carrier Lufthansa shed 2.73 percent to finish at 8.55 euros after disclosing that it would have to slash costs further if it wanted to turn a profit this year.
In Paris, according to Jean-Bernard Parenti of SwissLife Gestion Privee, "investors took profits in sectors that had been gaining, such as automobiles and mines."
Auto maker Renault plunged 7.86 percent to 24.90 euros after Standard and Poor's lowered its long-term debt rating to BB -- speculative grade -- from BBB-minus.
Elsewhere oil companies suffered from a slide in crude prices. Total fell 3.32 percent to 37.88 euros and Vallourec 1.90 percent to 84.96 euros.
(AFP)
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