European stocks fall
LONDON, Sept 24: Europe’s main stock markets slumped on Monday in a poor start to the week as investors reacted to news of sliding business confidence in eurozone economic engine Germany, dealers said.
London’s FTSE 100 index of top companies ended the day off 0.24 per cent at 5,838.84 points, while in Frankfurt, the Dax 30 gave up 0.54 per cent to finish at 7,413.16 points. In Paris, the CAC 40 fell by 0.94 per cent to 3,497.22 points, Madrid’s IBEX 35 lost 1.12 per cent to 8,138.40 points, and Milan’s FTSE Mib closed 0.78 per cent lower at 15,867 points.
In foreign exchange trade, the euro eased to $1.2910 from $1.2985 in New York late on Friday. Gold prices fell to $1,761.60 an ounce on the London Bullion Market, down from $1,784.50.
“European financial markets dropped on fears about faltering global growth, highlighted by a weaker than expected German Ifo survey which reminded investors that the euro area’s strongest economies are feeling the heat of the debt crisis,” said ETX Capital trader Ishaq Siddiqi.
“The data also raised fears that Germany could enter a recession by early next year, pressuring the euro currency against the dollar.
“On top of that, the uncertain situation in Spain rattles nerves with the country expected to present a new structural reform programme at the end of this week and announce results of its bank stress tests,” he added.
German business confidence fell for the fifth month in a row in September to the lowest level since February 2010, data showed on Monday, suggesting that the eurozone debt crisis was increasingly hurting the German economy. The Ifo economic institute’s closely watched business climate index dropped to 101.4 points in September from 102.3 points in August.
“September’s fall in the German Ifo business survey is a reminder that even the eurozone’s strongest economies are suffering from a severe economic downturn,” said Jennifer McKeown, analyst at Capital Economics research group.
The Ifo data dashed market expectations for an unchanged reading, according to analysts polled by Dow Jones Newswires. It also dragged down the US stocks, with the Dow Jones Industrial Average shedding 0.21 per cent to 13,550.90 points in late morning trade.—AFP