Key European indexes slide; euro edges up

October 13, 2012 - 1:49:37 am

LONDON: European stock markets retreated yesterday, while the euro rose against the dollar, as investors wound down a week once more overtaken by Spanish debt strains and weak outlooks for the global economy.

London’s FTSE 100 index of top companies dropped 0.62 percent to close at 5,793.32 points, while in Frankfurt the DAX 30 fell by 0.68 percent to 7,232.49 points and in Paris the CAC 40 gave up 0.72 percent to 3,389.08 points. Milan dropped 0.78 percent and Madrid fell 1.06 percent.

In foreign exchange trading, the euro firmed to $1.2946 from $1.2926 late in New York on Thursday. Gold prices dipped to $1,766.75 an ounce on the London Bullion Market from $1,769 an ounce on Thursday.

Shares failed to get much of a bounce from strong third quarter earnings reported by US banks JPMorgan Chase and Wells Fargo.

A surprise rise in the University of Michigan consumer sentiment index for October helped push Wall Street into positive territory in the morning, but the effect quickly wore off. In midday trading, the Dow Jones Industrial Average was down 0.15 percent to 13,306.36 point, while the S&P 500 dropped 0.37 percent to 1,427.51 points, and the tech-rich Nasdaq gave up 0.25 percent to 3,041.81 points.

JPMorgan shares were down 0.81 percent despite handily beating forecasts with its $5.7bn profit, up 34 percent from a year earlier. Wells Fargo fell 3.24 percent despite slightly surpassing expectations with a 22 percent gain to a $4.9bn net for the quarter. “Today’s session has been rather like watching paint dry to be perfectly honest...” said Angus Campbell, head of market analysis at Capital Spreads.

The International Monetary Fund this week slashed its growth forecasts across the world, citing the festering debt crisis in Europe, a stuttering recovery in the United States and a slowdown in China.

Adding to the worries is Spain’s continued refusal to ask for a bailout from international lenders despite the terrible state of its finances. Hopes for the US economy were given a boost on Thursday when the Labour Department said insurance benefits plunged unexpectedly last week to the lowest level since February 2008.

New jobless claims came in at 339,000 in the week to October 6, far below the previous week’s 369,000 and the then four-week average of 375,500. Those figures come on top of data last week showing the unemployment rate had fallen to 7.8 percent in September.

Asian stocks markets ended mixed. Japanese shares were hit by a plunge in telecom giant Softbank after it emerged it is eyeing a near $13bn deal to buy Sprint Nextel of the United States, in what would be one of Japan’s biggest ever overseas deals. Investors’ eyes were also firmly on China, which today releases trade figures for September amid hopes for an improvement on recent months that have revealed tumbling exports and imports as the demand in key markets dries up.

AFP

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