Europe Plunges on Global Sell-Off

Ivaylo
28 Feb, 2007
New York City

European stocks markets canceled out the gains made this year as the global sell-off continued with stock indices declining sharply across Asia and the US. Property groups were among the worst hit. European emerging markets were severely hit for a second successive session as investors lowered their exposure to risk. By mid morning, the three major stock indices were lower. Frankfurt Xetra Dax fell 1.6%, the CAC 40 in Paris shed 1.7% and London

[R]6:30AM European markets declined following global sell-off.[/R]
European markets were lower on Wednesday. By mid morning, Frankfurt Xetra Dax fell 1.6% to 6,712.13, the CAC 40 in Paris shed 1.7 % to 5,494.49 and London’s FTSE 100 slid 1.6% to 6,187.9. Of the emerging markets, Turkish Istanbul share index fell more than 3%, while Russian RTS index was off 2.7%.

Advancers

There were no prominent advancers.

Decliners

Rodamco Europe, the Dutch shopping centre owner, fell 4.3%. The company earlier in the week reported quarterly earnings that missed market expectations. Also in the sector, French Unibail fell 3.5 % and Spanish Metrovacesa shed 2.1%.

Stocks connected with emerging markets were lower and Raiffeisen International, the Austrian bank which owns assets across Russia and eastern Europe, fell 3.2%. EFG Eurobank, which has exposure through its Turkish assets, fell 3.5%. Swiss bank Julius Baer, the best performing stock on the SMI index this year, fell 3.8%. Eon, the German utility fell 4.2% after further doubts were cast on its 41billion euros bid to takeover Spanish Endesa.

Munich Re, the German reinsurer, fell 1.4% after it reported record full-year earnings of 3.5 billion euros, but added that it expected a general tendency towards a somewhat softer market.

Oil and gold

Crude oil for April delivery shed $1.54, or 2.5%, to $59.92 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the biggest intraday drop since Feb. 20. It traded at $60.96 in early trade in London.

Brent crude for April settlement lost as much as $1.12, or 1.8%, to $60.24 a barrel on the ICE Futures exchange and traded at $61.14 a barrel in early trade in London.

Gold rose as investors sought a haven following a rout in global equities sparked by the biggest decline in Chinese share prices in a decade and amid tension over Iranian nuclear research. Gold for immediate delivery rose as much as $9.30, or 1.4%, to $672.65 an ounce and traded at $671.95 in early trade in London.

Currenciers

The euro was lower against the U.S. dollar Wednesday as fears of a worldwide slump in markets weighed on the common currency. The euro bought $1.3188, compared with the $1.3243 it bought in New York late Tuesday. The British pound fell to $1.9552 from $1.9632 the day before. The dollar rose to 118.58 Japanese yen from 118.22 yen.

[R]5:00AM Gold declines as Chinese stock market plunges on Tuesday.[/R]
Gold futures for April delivery closed down $2.60 at $687.20 an ounce, while May silver managed to almost recover from a decline to $14.42 an ounce to end at $14.69, down 14.2 cents. May copper lost 1.6%, or 4.5 cents, to close at $2.825 a pound. June palladium fell by $4.90 to close at $356.60 an ounce but April platinum closed $11.30 higher at $1,253.30 an ounce.

Crude oil futures closed at two-month highs. The front-month April crude contract settled up 7 cents at $61.44 a barrel, the highest for a front-month contract since Dec. 22. Front month March gasoline added 3.84 cents to end at $1.8161 a gallon. March heating oil settled up 2.31 cents at $1.7793 a gallon and March natural gas lost 17 cents to finish at $7.533 a million British thermal units.

On the New York Board of Trade, Arabica coffee futures closed weaker but industry buyers curbed a speculative-led slide to three-day lows. March closed down 0.55 cent at $1.1730 a pound, with May off 0.60 cent at $1.1830. Futures on raw sugar in foreign ports for March reached a two-month high, as they settled up 0.43 cent at 11.45 cents a pound, with May up 0.11 cent at 10.80 cents.