Log in
Lost password
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  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.

React to this article
Latest news
Date Title
10:47a MATTRESS FIRM : The Bismarck Tribune, N.D., Jessica Holdman column
10:47a XCEL ENERGY : Greeley Tribune, Colo., Action Line column
10:46a UNILEVER : Giving Tuesday: 'Cause marketing' more than writing a check to charity
10:36aDJEU's Tusk Urges Leaders to Back Turkey Refugee Deal -- 3rd Update
10:36a FERRARI NV : Rosberg wins Abu Dhabi Grand Prix
10:25a ALON BLUE SQUARE ISRAEL : Reaches Agreement for Sale of its Interest in Diners Club Israel Ltd.
10:10a JUPITER TELECOMMUNICATIONS : Launch of Cable 4K (channel 295)
10:07a MALTA AIRPORT : President Kenyatta Arrives in Malta for Chogm 2015
10:07a SHOPRITE : Lagos State Seals Ikeja Shoprite
10:02a Banks expected to highlight cost containment as they report earnings
Latest news
Hot News 
OPPORTUNITY INVEST MGMT : 27 november 2015 - Announcement AGM on 22 december 2015
ATLANTIS RESOURCES : Tidal generating firm announces long partnership for investment by Gordon Calder
CYTOTOOLS : berichtet über Ergebnisse der europäischen klinischen Studie Phase III: Resultate der Behandlung des diabetischen Fußes mit DermaPro(R) bestätigen nicht die Ergebnisse der vorangegangenen Studien (DGAP News)
EUROPA OIL & GAS : Environment Agency asked to look at Leith Hill drilling firm's finances before giving permit
IMAGINATION TECHNOLOGIES : Sir Hossein Yassaie receives 2015 Lifetime Achievement Award in annual Elektra European Electronics Industry Award...
Most Read News
11/28 Shops2Apps Launches New Service to Transfer Sites and Stores into Native Mobile Apps
11/28 SES TLMACE A S : Project of Three Boilers Denitrification in Žilina Successfully Finished
12:53a NIOC NATIONAL IRANIAN OIL : Iran Petroleum Contracts Dazzling Enough for Foreign Investors
06:01a Toshiba’s Aquilion Lightning Lowers the Cost of Ownership for Entry-Level CT Systems
06:01a Pulmonary MR Imaging Is Now Possible with Toshiba’s Ultrashort Echo Time Sequence
Most recommended articles
10:36aDJEU's Tusk Urges Leaders to Back Turkey Refugee Deal -- 3rd Update
10:02aDJEU, Turkey Strike Deal to Stem Flow of Refugees -- 2nd Update
09:56a VOLKSWAGEN : VW knew fuel usage in some cars was too high a year ago: Bild am Sonntag
09:17a PIRAEUS BANK : European Commission approves Greek government aid to Piraeus Bank
08:57aDJEU, Turkey Strike Deal to Stem Flow of Refugees -- Update