Print

Mail

wiki links

European markets drop amid bleak economic outlook

European share prices closed lower again on Friday, extending losses amid persistent concerns about the impact record oil prices and a stronger euro will have on the economic outlook, dealers said.

They said a sharp reverse on Wall Street despite positive quarterly results from majors such as Google added to the negative tone on the 20th anniversary of the Oct. 19, 1987, "Black Monday" when global stock markets collapsed.

London's FTSE 100 index lost 1.23 percent to 6,527.90 points, while in Paris the CAC 40 shed 0.46 percent at 5,740.48 points and Frankfurt's DAX fell 0.47 percent to 7,884.12.

The Euro STOXX 50 was down 0.2 percent at 4,411.26 points.

In New York, stocks were down more than 1.3 percent in early trading, with some dealers beginning to talk about a correction given recent weak US economic data coupled with growing concerns over oil and the dollar.

Fred Dickson, market strategist at DA Davidson, said investors were anticipating further trouble for the economy and earnings as a soft dollar and high oil prices hit US consumers.

"Stock market bulls appear to be standing aside as corporate America delivers very mixed third quarter earnings reports and generally uninspiring fourth quarter guidance," he said.

"Market bears are reawakening with crude oil future prices having moved above US$90 a barrel, gold standing at its highest level since January 1980, the dollar continuing to weaken and dramatically extended global emerging stock markets beginning to weaken," Dickson said.

Strong British growth figures for the third quarter dampened hopes of an early cut in interest rates and dealers said this helped spark further losses.

The banks were also under pressure in Frankfurt after a sector downgrade by US investment house JP Morgan on concerns over earnings.

In Paris, the market gave up gains to close lower on the expiry of October options, with the tone despondent after a difficult week marked by a major strike on Thursday of public sector workers.

"The good news is that a stronger euro helps to offset in part the impact of higher oil prices," the Natixis investment bank said in a client note.

"The bad news is that European companies are seeing their input costs rise sharply while the stronger euro at the same time cuts their competitiveness," it sai.

Bucking the trend, Madrid chalked up another record performance as the defensive stocks in the main index provided support, with the main IBEX 35 index adding 0.15 percent to 15,529.7 points.

Elsewhere, Brussels fell 0.93 percent to 4,416.42, Milan was down 0.04 percent at 39,888 points, the Swiss Market Index shed 1.0 percent to 8,937.2 points and Amsterdam's AEX slipped 0.09 percent to 551.05 points.
This story has been viewed 1372 times.