Sun, Dec 03, 2006 - Page 10 News List

Survey on US manufacturing hits European markets

AFP , LONDON

European stock markets closed lower on Friday, reversing earlier gains after data in the US showed industrial activity contracted last month for the first time in more than three years.

In London the FTSE 100 index dropped 0.45 percent to close at 6,021.50 points, in Paris the CAC 40 fell by 1.38 percent to 5,254.05 points while in Frankfurt the Dax fell 1.08 percent to end the day at 6,241.13.

In morning deals, all three markets had posted gains, but a survey by the Institute of Supply Management showed weak manufacturing activity in the US, undermining sentiment by sparking fears of a sharp slowdown of the world's biggest economy.

The DJ Euro Stoxx 50 index of eurozone blue-chip shares tumbled 1.38 percent to 3,932.09 points.

The euro stood at US$1.3317.

The broad-market Standard and Poor's 500 index fell 0.17 percent to 1,398.19.

In Paris, shares in EDF surged 5.27 percent to 50.95 euros after government price caps on bills charged by EDF and Gaz de France were criticized by France's Constitutional Council.

CM-CIC Securities raised its EDF target price to 51.7 euros from 49, on the prospect that the company might launch a rival bid for Scottish Power to compete with the agreed offer by Iberdrola.

Earlier this week, Scottish Power accepted a takeover bid worth ?11.6 billion (US$22.55 billion) from Spain's second-biggest power company Iberdrola, a move that is set to create Europe's third biggest utility group.

In Madrid the Ibex 35 closed down 1.36 percent at 13,660.60 points, in Milan the SP/Mib lost 0.80 percent to 39,949 points and in Brussels the Bel 20 fell 0.62 to 4,114.52.

The Swiss SMI lost 0.76 percent to 8,420.38 and in Amsterdam the AEX closed 0.91 percent lower at 473.32 points.

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