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

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.

Latest news
Date Title
<1m ago LEIFHEIT : Aktiengesellschaft: Leifheit AG increases earnings forecast for financial year 2014 (DGAP Adhoc)
<1m ago Biodesix Announces Inclusion of VeriStrat in Updated NCCN Guidelines
<1m agoDJMARKET SNAPSHOT : U.S. Stocks Rise, Staged For Weekly Gain
1m ago Merkel voices support for Draghi after report of tensions
2m ago Assessing the impact of the shut of FutureMark's Alsip mill and Resolute's Laurentide mill on publication paper markets
2m ago PUBLIGROUPE : Extraordinary General Shareholders’ Meeting of PubliGroupe affirms integration into the Swisscom Group
2m ago SALINI IMPREGILO : Yesterday evening, October 23rd, Salini Impregilo and Strabag signed the agreement to commence works for the construction of the "Isarco River Underpass" of the Brenner Base Tunnel
2m ago LAGARDERE SCA : The first Next Generation Aelia Duty Free launched at Marseille!
2m ago KONE : Share repurchase 24.10.2014
3m ago CARLO GAVAZZI : Passing away of Giovanni Bertola
Latest news
Advertisement
Hot News 
DIGITAL RIVER : Announces Agreement to be Acquired by Investor Group Led by Siris Capital Group for $26.00 per Share in Cash
4IMPRINT : Full Year Expectations Underpinned By Strong Third Quarter
MERIT MEDICAL SYSTEMS : posts 3Q profit
LAYNE CHRISTENSEN : Assigned Patent
First Niagara Reports Third Quarter 2014 Results
Most Read News
1d ago AMAZON : took $170 million charge in Q3 on phone inventory, supplier costs
1d ago JUNIPER NETWORKS : AMC Networks buys 49.9 percent stake in BBC America
1d ago LOCKHEED MARTIN : Exclusive: Lockheed, Pentagon reach $4 billion deal for more F-35 jets
10h ago PFIZER : authorises share repurchase
1d ago Microsoft sales beat Street hopes, cloud profits up
Most recommended articles
3m ago EU Commission says not to blame for surprise UK budget demand
4m ago Merkel voices support for Draghi after report of tensions
5m ago FTSE falls, posts strongest week since August
8m agoDJPutin Reiterates Commitment to Free Floating Currency
12m ago Tesco hit with U.S. investor lawsuit over accounting irregularities
Dynamic quotes  
ON
| OFF