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Business

European stocks close lower

Latest update : 2009-01-13

Extending recent losses, European stock markets closed lower on Tuesday. In Paris, the CAC 40 was down 1.45 percent and in Frankfurt the DAX lost 1.75 percent. European shares were pulled down by financials.

REUTERS - European shares ended lower on Tuesday as investor concern intensified about the scale of the economic slowdown, with financials leading the index lower.
 
The pan-European FTSEurofirst 300 index of top European shares closed off 1.5 percent at 840.36 points, having sunk as far as 828.68 points.
 
"Markets are pricing in a greater European slowdown than perhaps imagined towards the end of last year and are selling off," said Peter Dixon, UK economist at Commerzbank.
 
"I think it is a realisation that the data flow over the last few weeks has been universally awful out of Europe," Dixon said.
 
European stocks came off lows as a Democratic congressional aide said that U.S. President-elect Barack Obama planned to urge Senate Democrats to back his request for the remaining $350 billion from the financial industry bailout.
 
Earlier, Federal Reserve Chairman Ben Bernanke said the government could consider buying troubled assets, providing asset guarantees or setting up a so-called bad bank to take over assets in exchange for cash and equity.
 
"The speech was nothing that had not been heard before," said Dixon.
 
Banks led the losers on the index. Barclays, RBS and Lloyds TSB were down 5.4-10.1 percent.
 
"UK banks have rallied in expectation of the next leg of Government support which is imminent but we stay with the view that the scale and pace of deterioration in the UK economy suggests that the risk of further capital being required remains significant," NCB Stockbrokers said.
 
 Deutsche Bank fell back 0.9 percent on talk that Deutsche Post - down 6 percent - could take a stake in the group as part of a deal to complete the sale of Deutsche Postbank, a source with direct knowledge of the matter said.

Deutsche Postbank soared 11.7 percent. Post and Deutsche Bank declined to comment.
 
Fortis gained nearly 18 percent on market talk that the Belgian government was set to buy the remains of the troubled financial services group.
 
The insurance sector were also heavyweight losers on the index. A Citigroup analyst said that a sale of assets by American International Group, once the world's biggest insurer by market value, to repay debt holders could leave little value for common stockholders. Axa, Allianz and RSA Insurance Group were down 3.4-4.85 percent.
 
Energy stocks rise as crude recovers
 
Energy stocks recovered from earlier losses as crude gained 3.35 percent, having earlier touched a three-week low.
 
BG Group, ENI and Royal Dutch Shell were up 0.1-1.6 percent.
 
Drug makers were on the rise as investors turned to the safety of defensive stocks.
 
Roche, Sanofi-Aventis and Shire were 1.2-2.3 percent higher. 

European aerospace group EADS rose 1.8 percent after the company said it had abandoned a "significant" defence acquisition in the United States to conserve cash and prop up Airbus plane sales to crisis-hit airlines.
 
Actelion gained 6 percent after Credit Suisse raised their price target on the stock to 74 francs from 67.
 
Across Europe, the FTSE 100 index was down 0.6 percent, Germany's DAX was 1.75 percent lower and France's CAC 40 was down 1.5 percent.
 

Date created : 2009-01-13

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