Key European stocks fall

February 09, 2013 - 1:00:51 am

LONDON: European stocks fell and the euro plunged against the dollar yesterday after the ECB held its key rate steady despite calls by France and others for looser monetary policy.

The European single currency plunged moments after ECB President Mario Draghi said that a strong rise in the euro in recent weeks was a sign of market confidence. It ended the session at $1.3386, down from $1.3519 late on Wednesday in New York.

In London, where the Bank of England also maintained its key rates, equities on the FTSE 100 index of top companies fell 1.06 percent to 6,228.42 points.

In Paris, the CAC 40 fell 1.15 percent to 3,601.05 points, while in Frankfurt the DAX 30 edged up 0.13 percent to 7,590.85 points, kept in positive territory by another raft of rosy economic data.

Also, EU leaders began difficult talks on the bloc’s 2014-20 budget under the watchful eye of a newly assertive European parliament hostile to any major spending cuts. In November, EU leaders failed to narrow sharp differences and while most expect a compromise to emerge this time, there is no certainty other than that the budget talks will be long.

In the meantime, gold prices edged up to $1,668 an ounce from $1,674.25 on the London Bullion Market on Wednesday.

As widely predicted by analysts and ECB watchers, the central bank’s policy-setting governing council voted to leave the main refinancing rate at a historic low of 0.75 percent, where it has been since July.

In London, the BoE also voted to freeze its key interest rate at a record-low 0.50 percent. In company activity, shares in Burberry tumbled 6.5 percent to 1,337 pence after the British luxury clothing and accessories group announced the departure of chief financial officer Stacey Cartwright.

In Paris, Sanofi slumped 3.99 percent to ¤66.60 after the French drug maker said the group’s annual net profits slid 12.8 percent to ¤4.97bn ($6.7bn). But Daimler rallied 2.78 percent to ¤44.21 after the German carmaker said its after-tax profit rose by 8 percent to ¤6.495bn in 2012/

US stocks also fell as Wall Street took a breather from the aggressive buying that has characterised most of 2013 so far. Midday into trade, the Dow Jones Industrial Average was down 0.77 percent, the S&P 500 dropped 0.59 percent and the Nasdaq Composite Index lost 0.64 percent. AFP