Sun, Sep 24, 2006 - Page 10 News List

Firms exposed to US growth cycle sag in EU trading

AP , LONDON

European stocks fell on Friday as companies with heavy exposure to the US growth cycle, such as software maker SAP and chip firm Infineon Technologies, took a beating after US data caused concerns about growth in the US economy.

The German DAX Xetra 30 index declined 1.3 percent at 5,883 and the French CAC-40 index also fell 1.3 percent, closing at 5,141. The UK's FTSE 100 index dipped 1.3 percent at 5,822.

The declines came after a surprisingly weak Philadelphia-area manufacturing survey in the US, released on Thursday after European stock markets had closed. Wall Street stocks also got off to a weaker start on Friday.

European strategists tried to allay recession fears.

"We don't expect a disaster in the US economy. We do expect a growth slowdown, but we see a soft landing rather than a crash," said Felix Lanters, head of portfolio management at Theodoor Gilissen Bankiers in Amsterdam.

Investors are worried that companies with exposure to the US growth cycle could see lower earnings.

Shares of SAP and Infineon were big decliners in Germany, both shedding more than 2 percent. Other exporters likely to be affected by a US downturn also fared poorly, with shares of engineering company ABB declining 2.7 percent and Sweden's SKF shedding 2.7 percent.

Higher crude oil prices placed some pressure on shares of airlines such as British Airways, which fell 2 percent, and auto stocks such as Volkswagen, which declined 2.1 percent.

Shares of Dutch telecom KPN dipped 2.3 percent after the company said the Dutch government would sell its remaining 167 million share stake. The move leaves KPN free of government interference to decide its own future.

Shares of German sportswear makers Adidas and Puma got an early boost after US peer Nike Inc said late on Thursday that it expected higher earnings per share in the second half of the year.

Puma shares closed 2 percent higher, while Adidas turned back from early gains, with shares ending down 0.6 percent.

This story has been viewed 2584 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top