European traders struggle amid a lack of good news


Sun, Feb 01, 2004 - Page 10

European stock markets struggled Friday, the last trading day of January, as dealers found little news to whet their appetites amid a mixed performance on Wall Street.

The British FTSE 100 index slipped 0.47 percent to 4,390.7 points, the German DAX 30 index lost 0.91 percent to 4,058.60 points and the French CAC 40 closed 0.65 percent lower at 3,638.44 points.

The DJ Euro Stoxx 50 index of leading eurozone shares fell 0.73 percent to 2,839.13 points.

The euro stood at US$1.2456.

Markets took a breather towards the end of a month that has seen the DAX 30 and CAC 40 rally by over two percent, while the FTSE 100 has lost 1.9 percent.

Many analysts still subscribe to the idea of the "January barometer," which decrees that "as January goes, so goes the rest of the year."

Anais Faraj, European equity strategist at Nomura Securities, is not one of them.

But he said: "There is a strong seasonal pattern. If you look at the US and Europe, really since 1970, on average January has delivered a reasonably good return."

However, if history is any guide, investors could be in for disappointment over the next few weeks.

"On average over the last 30 years February has been very, very weak. It's one of the weakest months of the year," said Faraj.

"I think we're going to see a sharp drop [in the stock market] into February and then by the end of February the market will pick up," he predicted.

There was little news from New York to galvanize markets in Europe on the last trading day of January.

US stocks were mixed as European markets closed, with investors still trying to fathom the implications of a subtle change in the tone of the US Federal Reserve's stance on monetary policy which sparked a big sell-off a day earlier.

Shares in French Internet and telecommunications firm Iliad debuted on the Paris stock exchange with a 30.37 percent jump in value to 21.25 euros.

In Amsterdam, the AEX index slipped 0.26 percent to 353.31 points, the Swiss SMI was down 0.55 percent at 5,736.4 points, in Milan the Mib 30 lost 0.92 percent to 27,694 points, in Madrid the Ibex-35 shed 1.04 percent to 7,929.9 points and in Brussels the Bel-20 closed up 0.08 percent at 2,383.76 points.