Weak Banks, France, Germany Fall 1.7%

123jump.com Staff
11 Jun, 2008
New York City

The weakness in financial stocks dragged European market indexes lower. Germany, France, UK and Switzerland dropped nearly 1.7%. Royal Bank of Scotland fell 9% and HBOS, the mortgage lender dropped 12% after the RBS CEO cautioned that more bad news may be ahead in the next fifteen months. The cautionary talk dragged banking stocks sharply lower in the region.

[R]2:00PM New York, 8:00PM Frankfurt – European stocks fall, inflation rises in France./R]

Europe market update

European stocks fell in today’s trade losing recent gains and the key indices in Germany and France closed lower.

The CAC 40 retreated 1.74% to 4,678.41. In Germany the DAX 30-index fell 120.42 points or 1.78% to 6,650.68. Shares in Switzerland dropped as the Swiss Market index fell 122.45 points or 1.68% to 7,161.76. The FTSE 100 dropped 99.80 points or 1.71% to 5,727.50.

Oil Price Rise

Brent Crude oil futures gained $1.88 or 1.43% to 132.90 a barrel. Oil has been rising though some analysts commented that a correction in crude oil price is overvalued. A sharp rise in oil price in the last five months have fueled a price rise in food and stoked inflation to near double digit from Venezuela, Malaysia, Vietnam, Indonesia, China and India.

EU 27 current account records a deficit of 23.7 billion euros

The EU27 external current account recorded a deficit of 23.7 billion euro in the first quarter of 2008, compared with a deficit of 30.4 billion in the first quarter of 2007 and a deficit of 2.8 billion in the fourth quarter of 2007.

This is a decrease compared to the first quarter of 2007 when the deficit stood at 30.4 billion euros. The external trade in services recorded a surplus of 16.3 billion euros in the first quarter of 2008. The EU15 recorded a current account deficit of 17.6 billion euros in the first quarter of 2008 compared to a surplus of 3.7 billion euros in the first quarter of 2007.

UK unemployment claims increase in May

The Office of National Statistics reported today on its website that the number of unemployed people, the unemployment rate and the claimant count have all increased in May.

In the latest reference period, the working age employment rate was unchanged from the previous quarter ended January at 74.9%. According to the statistics office, the number of people in employment increased by 76,000 over the quarter, while the unemployment rate grew 0.1 percentage point at 5.3%.

Gainers and losers

France Telecom led the two gainers in the CAC 40 index stocks with a rise of 0.19% to 18.07 followed by Vallourec which gained 0.15% to 199.48 euros.

Michelin led the decliners in the CAC 40 index with a loss of 5.58% to 48.18 euros followed by losses in Veolia Environment of 5.13% to 40.65 euros, in Saint Gobain of 4.13% to 46.13 euros, in PPR of 3.52% to 78.09 euros and in Peugeot of 3.46% to 36.21 euros.

Among the DAX 30 index shares, Infineon Technologies led the gainers with a rise of 1.11% to 5.92 euros followed by gains in Fresenius Medical Care of 0.39% to 35.80 euros and in Deutsche Telekom of 0.05% to 10.24 euros

Continental AG led the decliners in the DAX 30 index with a fall of 5.29% to 63.26 euros followed by losses in ThyssenKrupp AG of 4.02% to 40.15 euros, in BMW AG of 3.52% to 33.15 euros, in MAN AG of 3.27% to 84.82 euros and in Daimler of 3.10% to 43.38 euros.

Precious metals prices

At 4:32 PM, in London, gold gained $12.1 cents to $876.25 an ounce. Silver gained 19 cents to $16.58 an ounce, platinum advanced $38 cents to $2,022 an ounce and palladium gained $4 to $430 an ounce.

World markets review

In Tokyo Nikkei 225 Index closed higher 162.31 or 1.16% to 14,183.48, in Hong Kong Hang Seng index decreased 47.92 or 0.21% closed to 23,327.60. In Australia ASX 200 index higher 29.80 or 0.55% to close 5,467.30. In Malaysia KL Composite index decreased 1.68 or 0.14% closed to 1,229.28.

In South Korea Kospi Index increased 7.29 or 0.41% to close at 1,781.67, in Thailand SET index closed lower 0.28 or 0.04% to 791.66 and Indonesia JSE Index edged increased 0.97 or 0.04% to 2,374.78. Sensex index in India increased 296.07 or 1.99% to 15,185.32.

The CAC 40 retreated 1.74% to 4,678.41. In Germany the DAX 30-index fell 120.42 points or 1.78% to 6,650.68. Shares in Switzerland dropped as the Swiss Market index fell 122.45 points or 1.68% to 7,161.76. The FTSE 100 dropped 99.80 points or 1.71% to 5,727.50.