European Markets Plunge, Financials Decline

123jump.com Staff
20 Feb, 2009
New York City

European stocks fell on a weakness in financial stocks as the financial outlook deteriorated and prospect of another rate cut dimmed. A manufacturing and services survey in France showed that both sectors contracted at a rapid rate in February.

[R]1:00PM New York, 6:00 Frankfurt – European manufacturing and services contract to a record low[/R]

European stocks fell on a weakness in financial stocks as the financial outlook deteriorated and prospect of another rate cut dimmed. A manufacturing and services survey showed that both sectors contracted at a rapid rate in February. The contaction in both industries shows that the recession is deepening.

French national statistics office also reported that manufacturers confidence in February fell to the lowest level in 46 years.

Market sentiment

In Frankfurt trading the DAX 30 Index lost 4.8% or 4.76 to 4,014.66. Of the 30 index shares only one gained and 29 lost. Fresenius Medica rose 0.2%.

Deutsche bank led decliners with a loss of 9.4% followed by gains in Allianz SE REG of 9%, in ThyssenKrupp AG of 7.8%, in Daimler AG of 7.1% and Man AG of 6.3%.

In Paris the CAC 40 slumped 4.3% to 2,750.55. Of the 40 index shares only Essilor International advanced with a 0.9% gain.

Insurance group, AXA led decliners with a slump of 18.4% after Standard & Poor slashed its credit outlook, followed by losses in Saint Gobain of 15%, in Credit Agricole of 9.2%, in Dexia of 9.4% and Schneider Electric SA of 8.2%.

Schneider Electric fell despite a 6.3% rise in full-year profit to €1.7 billion.

European Manufacturing and Services Contract, Record Low

Markit Economics today released data showing that manufacturing and service industries in Europe fell steeply in February compared to the month before as recession escalated and forced firms and households to cut expenditure.

According to the data release, a composite index for manufacturing and services tumbled from 83.3 in January to 36.2 in February. The manufacturing index alone fell from 34.4 in January to 33.6 in February. The services sector, which was already low at 42.2 in January, slid further to 38.8.

Manufacturing confidence falls in France

Insee, today reported that manufacturers confidence in France fell to the lowest level since 1962 in February. The national statistical agency’s index of sentiment showed a decline from 73 to 68. Four hundred manufacturers were sampled.

Europe Markets Review

In London FTSE 100 Index closed lower 129.31 or 3.22% to 3,889.06, in Paris CAC 40 Index decreased 122.05 or 4.25% to close at 2,750.55 and in Frankfurt DAX index lower 200.55 or 4.76% to close at 4,014.66. In Zurich trading SMI decreased 139.31 or 2.79% to close at 4,851.21.