LONDON: Eurozone shares sank to three-month lows yesterday after an Italian election stalemate renewed concerns about the future of the euro zone and sent investors in search of insurance against a deeper sell-off.
No group managed to secure a majority in the Italian parliament, heralding weeks of political uncertainty and raising the prospect of a government of sworn enemies — the centre right led by former prime minister Silvio Berlusconi and the centre left under Pier Luigi Bersani. Italy’s benchmark FTSE MIB index sank 4.9 percent to 15,552.20 points, posting its biggest daily fall in nearly a year and with all but two of its 40 companies in the red.
The EuroSTOXX 50 index closed down 3.1 percent at 2,570.52 points, its lowest finish since November 28. The move extends the euro zone blue chip index’s retreat from an 18-month high of 2,754.80 points hit at the end of January. The broader, pan-European FTSEurofirst 300 fell 1.4 percent to 1,150.25 points.
US stocks advanced yesterday after Federal Reserve Chairman Ben Bernanke defended the Fed’s bond-buying stimulus before Congress, but he warned forced spending cuts that could be triggered this week represented a headwind for the economy.
Gains in homebuilders and other consumer stocks, following strong economic data, kept the S&P 500 up slightly and a 5 percent jump in Home Depot lifted the Dow industrials. The PHLX housing sector index rose 2.6 percent. The Dow Jones industrial average rose 92.07 points or 0.67 percent to 13,876.24. The S&P 500 gained 4.67 points or 0.31 percent to 1,492.52. The Nasdaq Composite added 1.44 points or 0.05 percent to 3,117.69.
Dubai’s bourse made its largest one-day loss in three weeks yesterday as its heaviest stock Emaar Properties dropped on lower-than-expected dividend distribution, while most other regional markets also retreated.
Shares in Emaar fell 2.8 percent to 5.14 dirhams, down from the previous session’s 51-month high. The developer proposed a 2012 cash dividend of 10 fils, similar to that of 2011 and 2010. The stock had rallied in recent weeks partly on hopes of a higher dividend payout. The emirate’s index slipped 1 percent in its largest daily loss since February 3. In Saudi Arabia, petrochemical stocks led declines on the bourse as worries over demand growth hit oil prices after inconclusive election results in Italy. Investors fear a resurgence of the eurozone debt crisis. In Qatar, the market recorded losses for a fourth consecutive session, losing 0.9 percent, as investors reacted to dividend news and payouts.
Qatar Electricity and Water slumped 6.1 percent as the stock traded ex-dividend. Gulf International Services tumbled 8.7 percent. The company reported a 64-percent rise in 2012 profit and a dividend of QR1.5 per share. Reuters
