Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

European Stocks Drop on Euro-Zone Economic Data, Worry Over Fed

02/21/2013 | 01:54pm US/Eastern
Recommend:
0

By Sara Sjolin and Andrea Tryphonides

European stocks slumped, hurt by downbeat euro-zone economic data and worries that the Federal Reserve could reduce its stimulus measures.

Italian shares were particularly battered as jitters about weekend elections added to investors' worries about the economic health of the 17-nation euro bloc. The euro dropped to its lowest level against the dollar in six weeks.

The benchmark Stoxx Europe 600 index dropped 1.5% to 284.86, its lowest close in two weeks, with banks and miners posting some of the biggest losses.

European stocks on Thursday followed losses in the U.S. made Wednesday after the latest Federal Open Market Committee minutes showed officials were worried that the U.S. central bank's easy-money policies could lead to instability in financial markets and may be difficult to pull back in the future.

Several members said the central bank should prepare to vary the pace of its asset purchases depending on the economic outlook.

That was followed by disappointing preliminary readings of purchasing managers' indexes from euro-zone economies early Thursday. The preliminary composite PMI for the euro zone slumped to a two-month low of 47.3 in February, indicating the region's downturn steepened. Economists surveyed by Dow Jones Newswires had forecast a February reading of 48.5.

The manufacturing PMI for Germany rose to 50.1, a 12-month high, while the same reading for France climbed to 43.6, a 2-month high, but fell short of expectations. A reading above 50 indicates expansion.

The data hit the euro and oil prices, and pushed money into safe-haven assets like German government bonds.

"We have quite a few triggers for nervousness coming through today. You had a rise in the markets for a while and people were becoming more and more nervous and looking for the first crack, " said Justin Urquhart Stewart, co-founder of Seven Investment Management.

"Nothing fundamentally has changed. On the longer term, the economy is still healing, but markets were getting ahead of themselves and waiting for economic data to back it up. We had a wave of everyone thinking the glass was half full, but now that perception has changed," he said.

Credit Suisse analysts noted that the setback in the composite PMI came after three consecutive rises. "But, the weakness in the services sector is a reminder of the weak domestic demand in the euro area, and more in general, of how fragile the (modest) recovery is likely to be," it added.

The U.K.'s FTSE 100, which had hit its highest close since 2008 earlier in the week, dropped 1.6% to 6291.54. Germany's DAX fell 1.9% to 7583.57 and France's CAC-40 slid 2.3% to 3624.80.

Italy's FTSE Mib slid 3.1% to 16.009.55 investors as worried that a new government could end the country's current reformist drive. Banks bore the brunt of the selloff; UniCredit dropped 4.3% and Intesa Sanpaolo declined 4.1%.

Banks also fell elsewhere in Europe. Societe Generale lost 4.5% in Paris, and HSBC Holdings fell 2.3% in London.

Miners, which are sensitive to economic swings, also declined. BHP Billiton shaved off 4%,

AXA fell 3.1% on a drop in full-year net profit. The insurer said it would implement additional cost-cutting measures.

Swiss Re rose 2.5% after the reinsurance company reported a 62% increase in full-year net income and said it was well positioned in 2013 despite the challenging outlook in developed economies.

BAE Systems led gains in the FTSE 100, climbing 4.1%, after the company announced a share buyback program and said growth in new markets should offset the impact of shrinking military spending in the U.S. and Europe.

The euro fell to $1.3206, from $1.3283 late Wednesday in New York, after dropping to $1.3168 during the European session.

By the close of European equity markets, light, sweet crude for April delivery was 2.3% lower at $93.00 a barrel on the New York Mercantile Exchange.

Recommend :
0
React to this article
Latest news
Date Title
3m ago UNITED INTERNET : 03.09.2014 United Internet acquires 100% of Versatel shares
3m ago UNITED INTERNET : acquires 100% of Versatel shares (03 09 2014 Ad hoc announcement acc to Sec 15 WpHG)
6m ago SAMSUNG HEAVY : LADOL, Samsung Pact On U.S. $3.8 Billion Project to Create 50,000 Jobs
7m ago CHINESE PEOPLE : Asian editorial excerpts
7m ago US DOLLAR TECHNICAL ANALYSIS : Aiming to Extend Advance
10m ago HSBC : China Service Sector Activity Grows In August
17m ago EUR/USD TECHNICAL ANALYSIS : Selloff Stalls at One-Year Low
17m ago USD/JPY TECHNICAL ANALYSIS : Year-to-Date High in Sight
17m ago Central Petroleum Limited Conference Presentation - RIU Good Oil Conference
18m ago CENTRAL PETROLEUM : ASX:CTP) Conference Presentation - RIU Good Oil Conference
Latest news
Advertisement
Hot News 
COMPUWARE : Harwood Feffer LLP : Announces Investigation of Compuware Corp.
CTRIP : Royal Caribbean Cruises Ltd. : to Sell Celebrity Century to Ctrip
BAIDU : IndoorAtlas : Receives US $10 Million Investment From Baidu and Signs Exclusive Agreement for Chinese Market
SANTANDER CONSUMER USA : Announces Secondary Offering by Sponsor Auto Finance Holdings Series LP
HOME DEPOT : may be latest retailer to be hacked; investigates suspicious credit card activity
Most Read News
1d ago APPLE : Celebrity hacking clouds Apple's upcoming product launch
1d ago HOME DEPOT : may be latest retailer to be hacked; investigates suspicious credit card activity
1d ago GLENCORE : Vale, Glencore break off talks over Canada nickel deal: sources
1d ago CTRIP : Royal Caribbean Cruises Ltd. : to Sell Celebrity Century to Ctrip
1d ago 1 AUTOMOTIVE : Announces Conversion of 2.25% Convertible Senior Notes due 2036
Most recommended articles
2d agoDJZambia Copper Miners Say Crippled by Unpaid $600 Million Tax Refund-Mines Body
5d ago S&P 500 edges up to set new record; best month since Feb
7m ago US DOLLAR TECHNICAL ANALYSIS : Aiming to Extend Advance
17m ago EUR/USD TECHNICAL ANALYSIS : Selloff Stalls at One-Year Low
17m ago USD/JPY TECHNICAL ANALYSIS : Year-to-Date High in Sight
Dynamic quotes  
ON
| OFF