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| European shares sharply lower | |
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| Tweet Topic Started: Feb 15 2009, 12:34 PM (53 Views) | |
| Warren | Feb 15 2009, 12:34 PM Post #1 |
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European shares sharply lower From correspondents in London May 21, 2008 04:53am Article from: Agence France-Presse EUROPEAN stock markets closed sharply lower today, with sentiment hit by a sharp spike in German wholesale inflation and a weakening in investor sentiment in Europe's biggest economy. Dealers said the news undercut recent growth data that had shown Germany - and by extension Europe - to be holding up reasonably well to the US economic slowdown sparked by the subprime home loan crisis and resulting credit squeeze. Hefty losses on Wall Street in early trade after much stronger-than-expected US wholesale price figures for April added to the pressure, encouraging widespread profit-taking on recent gains. In the past several weeks, the markets have done well on the view that the worst of the subprime crisis was over, but investors have remained cautious, fearing that the credit squeeze could undercut growth later this year. As a result, investors have been quick to take profits and overnight bad data plus fresh record highs for oil provided a good opportunity, dealers said. With oil nearing $US130 per barrel, inflationary pressures were only likely to get worse, they said. In London, the FTSE 100 index tumbled 2.90 per cent to 6191.60 points. In Paris, the CAC 40 shed 1.70 per cent to 5054.88 points and in Frankfurt the Dax lost 1.49 per cent to 7118.50 points. The Euro Stoxx 50 index of leading eurozone companies was down 1.54 per cent. The euro was at $US1.5672. In Asia overnight, Japanese shares fell 0.77 per cent, Hong Kong shed 2.23 per cent and Sydney was off 0.7 per cent. On Wall Street, the wholesale inflation figures coupled with fresh records near $US130 for oil - adding to price pressures - undercut sentiment. A weak earnings report from Home Depot highlighted the continuing problems in the housing market and the wider impact they can have, dealers said. The Dow Jones Industrial Average was down 1.56 per cent. US wholesale prices rose 0.2 per cent in April overall but the core rate of inflation - excluding food and energy - jumped 0.4 per cent. The figures suggested higher food and energy costs were now feeding into other items, with the potential to drive inflation higher. In London, dealers said miners once again led the market but this time downwards on very heavy profit-taking after their recent strong gains. BHP Billiton slumped 7.88 per cent to 2023 pence and Kazakhmys shed 7.77 per cent to 1792 pence. British Airways lost 6.73 per cent to close at 207.75 pence, hit by fresh concerns over its fuel bill as oil charts new highs. Retailers were also under pressure, with Marks and Spencer down 5.04 per cent to 396 pence despite solid results as investors fretted over the outlook for consumer spending. In Paris, dealers said early losses became more pronounced once Wall Street opened and oil jumped higher. |
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6:22 AM Jul 12