Growth Concerns Pull Europe Down

Ivaylo
08 Jun, 2006
Frankfurt

Concerns prompt that the higher interest rates may hold back economic growth. The European Central Bank releases its interest rate decision at 1145 GMT later today. Most analysts are forecasting a quarter point rate rise to 2.75%, but a small minority expect a decisive 50 basis point rise. That, together with the most likely raising of U.S. rates by the Fed, is ample food for worries about economic growth.

[R]6:30AM Europe sheds more than 2% on growth worries.[/R]
European markets were down in mid morning trading. The FTSE 100 in London lost 2.2% to settle at 5,583.3, while the Xetra Dax in Frankfurt was off 2.3% to 5,417.64 and the CAC-40 in Paris declined 2.5%, stand at 4,704.83. The biggest decliners among the broad based fall were London listed miners with Xstrata off 6.2% and Antofagasta shedding 3.9%. Growth concerns struck industrial groups with Atlas Copco edging 5% down and Thyssen Krupp plunging 4.9%. Auto stocks also performed badly with BMW, shedding 0.4%, Porsche dropping 2.3% , Volkswagen slipping 1% and DaimlerChrysler declining 1.9%.France’s Renault dived 2.8% and Italy’s Fiat lost 2.8%.

Light sweet crude oil for July delivery dropped $1.15 cents to $69.67 a barrel and July Brent crude futures on London''s ICE Futures exchange lost 28 cents to $68.91 a barrel. Gold bullion started trading Thursday at a bid price of $621.85 a troy ounce, higher than $621.25 late Wednesday.The dollar rose slightly against the euro. In morning European trading, the euro purchased $1.2772, down from $1.2794 in New York on Thursday. The British pound eased to $1.8549 from $1.8560 in New York, while the dollar advanced to buy 113.76 Japanese yen from 113.46 yen the day before.

[R]5:00AM Gold declines as dollar continues higher.[/R]
Gold for August delivery finished $2.10 down at $632.60 an ounce on NYME, its lowest close since April 24. Other metals were mixed with silver finishing 4.5 cents up at $11.89 an ounce, platinum off $4.40 at $1,231.50 an ounce and palladium ending $7.10 down at $338.75. Copper overcame morning weakness to finish 9.5 cents up at $3.584 a pound.

Crude oil for July delivery finished $1.68 down at $70.82 a barrel and gasoline futures ended 5.5 cents down at $2.124 a gallon, while heating oil declined 4.7 cents at $1.9954 a gallon.