LONDON: European stock markets fell sharply yesterday, hit by comments by the Bundesbank chief that the debt crisis could take a decade to overcome and speculation swirled over a potential credit rating downgrade.
Frankfurt’s DAX 30 fell 2.34 percent to 7,503.03 points, while in Paris the CAC 40 dropped 2.35 percent to a four month low of 3,599.23 points, and London’s FTSE 100 shed 0.96 percent to 6,244.21 points.
Comments from Bundesbank chief Jens Weidmann that Europe’s recovery could well take a decade, also hit sentiment in the afternoon session. European car sales dopping to near a 20 year low, with Germany’s auto market in particular suffering, also added to the negative mood. In foreign exchange activity, the European single currency fell to $1.3050, from $1.3174 late in New York on Tuesday.
Gold prices climb
Gold prices climbed to $1,392 per ounce on the London Bullion Market. That compared with $1,380 late in New York on Tuesday, when it had struck a two-year low at $1,321.95 on the back of disappointing Chinese GDP data.
In company news, British retail giant Tesco saw its share price slide 3.9 percent to 369.75 pence after posting falling annual profits. Tesco said it took a £1.2bn hit from failed US division Fresh & Easy, sparking the first drop in annual profits in almost two decades, and confirmed its exit from the United States.
Shares in the European aerospace and defence giant EADS leapt by 4.85 percent to ¤39 in Paris however as the group continued the revamp its shareholder structure with German automaker Daimler selling its stake.
US stocks moved lower after earnings reports from Bank of America, Intel and Yahoo disappointed investors. The Dow Jones Industrial Average sank 0.99 percent to 14,610.10 points in midday trading. The broad-based S&P 500 dropped 1.54 percent to 1,550.39 points, while the Nasdaq Composite Index fell 1.89 percent to 3,203.05 points.
Asian equities traded mixed. Tokyo climbed 1.22 percent, Sydney rose 1.09 percent, while Seoul and Shanghai were flat and Hong Kong fell 0.47 percent. AFP
