Credit Worries Drag Stocks Lower in Europe

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

European stocks declined after credit market worries and rising inflation put investors on the defensive. Porsche, maker of luxury sports cars reported 10-month sales rose to 6.02 billion euros from 5.98 billion euros in the same period a year ago. Sales of SUV Cayene soared 47% and sports car GT2 fell 15%. Two largest paper manufacturers Stora Enso and UPM-Kymmene along with other companies projected lower earnings for the year on rising cost of pulp and fuel.

[R]1:15PM New York, 7:15PM Frankfurt – European stocks fall on rising inflation./R]

Europe market update

European stocks lost ground slipping gains recorded yesterday, the key indices in Germany and France closed lower.

The CAC 40 retreated 1.65% to 4,608.96 In Germany the DAX 30-index fell 73.52 points or 1.08% to 6,722.64. Shares in Switzerland lost as the Swiss Market index fell 93.96 points or 1.30% to 7,157.46. The FTSE 100 slipped 116.00 points or 1.98% to 5,745.90.

French Cabinet sanctions for illegal downloading

The French cabinet approved a bill that will penalize people who illegally download recorded material from the Internet. Penalties for pirates will include suspension from using the internet for three to twelve months. The legislation will create a separate regulatory body that will handle copyright law violation.

EADS not slowing down production

The European consortium for commercial and defense aircraft carriers, EADS, will continue to increasing commercial planes production, despite the challenging operating environment from rising oil prices.


Loius Gallos, the chief executive officer stated that production will continue to be increased until it reaches output levels of 40 single-aisle and 11 wide body planes per month. Some orders for planes may be cancelled or be deferred as crude oil prices are at a record level.

Gainers and losers

Sanofi- Aventis led the gainers in the CAC 40 index stocks with a rise of 0.97% to 42.46 euros followed by gains in Essilor International of 0.92% to 40.41 euros and in EDF of 0.14% to 62.49.

Dexia led the decliners in the CAC 40 index with a loss of 5.05% to 13.16 euros followed by losses in Michelin of 4.82% to 48.88 euros, in Saint Gobain of 4.30% to 42.25 euros, in EADS of 4.20% to 13.44 euros and in Stmicroelectronis of 4.04% to 7.37 euros.

Among the DAX 30 index shares, E.ON AG led the two gainers with a rise of 1.53% to 128.43 euros followed by gains in RWE AG of 0.85% to 80.37

Deutsche Borse led the decliners in the DAX 30 index with a fall of 4.06% to 81.71 euros followed by losses in Deutsche Post of 3.66% to 18.14 euros, in BMW AG of 3.07% to 32.83 euros, in Henkel KGaA of 2.79% to 27.88 euros and in MAN AG of 2.70% to 84.64 euros.

Precious Metals Movement

At 4:16 PM, in London, gold gained $8.40 to $887.50 an ounce. Silver advanced 34 cents to $17.00 an ounce, platinum gained $36 to $2,103 an ounce and palladium gained $6 to $467 an ounce.

Asian markets review

In Tokyo Nikkei 225 Index closed higher 104.45 or 0.73% to 14,452.82, in Hong Kong Hang Seng index increased 267.81 or 1.16% closed to 23,325.80. In Australia ASX 200 index higher 20.50 or 0.38% to close 5,443.20. In Malaysia KL Composite index decreased 15.17 or 1.24% closed to 1,212.59.

In South Korea Kospi Index increased 23.42 or 1.34% to close at 1,774.13, in Thailand SET index closed lower 11.43 or 1.47% to 765.74 and Indonesia JSE Index edged decreased 13.40 or 0.56% to 2,364.58. Sensex index in India decreased 274.59 or 1.75% to 15,422.31.