Home / World Business
Sun, Aug 29, 2010 - Page 10 News List

European stocks decline on fears of stalling economy

BLOOMBERG

European stocks declined for a third week on concern that the US economy is stalling, while US Federal Reserve Chairman Ben Bernanke pledged that the central bank “will do all that it can” to help the recovery.

CRH PLC led construction stocks lower, plunging 13 percent, after forecasting lower earnings. Yell Group PLC tumbled 16 percent after STOXX Ltd said it was removing the company from its benchmark European index. Persimmon PLC gained 8.4 percent after reporting improved earnings.

The STOXX Europe 600 Index slipped 0.4 percent to 251.24 this week as 10 out of 19 industry groups dropped. The gauge has declined 7.7 percent from this year’s high on April 15 after a string of worse-than-forecast economic reports from the US and renewed concern that some European countries will struggle to contain deficits fueled concern that the global economic recovery is losing steam.

“We are going to see a continued string of disappointing US numbers, and while Europe lags the US by about six months, we could expect horrible numbers coming out of Europe by Christmas,” said Christian Blaabjerg, chief equity strategist at Saxo Bank in Copenhagen. “We’ll see some very considerable price retracement in equities.”

National benchmark indices fell in 14 of the 18 western European markets. Germany’s DAX lost 0.9 percent and France’s CAC 40 slid 0.5 percent, while the UK’s FTSE 100 gained 0.1 percent.

CRH, the world’s second-­largest maker and distributor of building materials, tumbled by 13 percent after forecasting that earnings before interest, taxes, depreciation and amortization would probably fall about 10 percent this year.

A gauge of construction and materials shares on the STOXX 600 fell 2.3 percent, the second-worst performance out of 19 industry groups.

Allied Irish Banks PLC fell 6.3 percent and Yell tumbled 16 percent as STOXX said the companies would be among seven removed from the benchmark STOXX 600 from next month after its regular quarterly membership review.

United Internet AG rallied 8.6 percent, the biggest gain on the STOXX 600. The German Internet service provider expects sales to rise about 15 percent to 1.9 billion euros (US$2.4 billion) this year.

This story has been viewed 962 times.
TOP top