European stock markets close down after week of losses

GMT 18:46 2014 Friday ,08 August

Arab Today, arab today European stock markets close down after week of losses

BGC Partners firm in London
London - AFP

Europe's major stock markets slid on Friday as investors fled for safe havens amid US air strikes in Iraq and fierce fighting on Ukraine's eastern border, but closed off multi-month lows.
Frankfurt's main index dropped below the psychologically important 9,000-points level for the first time since March after Tokyo shares tumbled to a two-month low.
By the close of trading, DAX index managed to claw back earlier losses to end down 0.33 percent at 9,009.32 points, more than 10 percent below the record high hit on June 20.
London's benchmark FTSE 100 index shed 0.45 percent to 6,567.36 points, while in Paris the CAC 40 inched down 0.05 percent at 4,147.81 points.
The Stoxx Europe 600, which tracks a basket of companies from across Europe, closed at its lowest point since late March.
"The market remains extremely fragile as we approach the weekend with the first strike in Iraq added to the very difficult situation in Ukraine," said Alexander Baradez, an analyst at IG France.
Investors seeking refuge from risk fled to German and French bonds, pushing down interest rates for the eurozone's two largest economies to record low levels.
On Thursday, European Central Bank president Mario Draghi warned geopolitical risks affecting Europe "have increased and are higher than they were a few months ago" and could hurt the recovery.
But equities managed to pull back from lows touched earlier in the day on Friday after Russian media reported that Moscow has offered to mediate between Kiev and the separatists in the east of Ukraine.
"After a week of steep declines, stock markets recovered when talk of de-escalation from a Russian military official gave traders (who are shorting) the market a chance to take profit," said Jasper Lawler at CMC Markets.
"The FTSE 100 has now almost retraced the entire rally (since April), the German DAX retraced the whole rally and made a new 2014 low and the S&P 500 has corrected half of the rally."
- US warplanes spook market -
US jets struck jihadist positions in northern Iraq on Friday, a potential turning point in a two-month crisis Washington said was threatening to result in genocide and to expose US assets.
President Barack Obama's order for the first air strikes on Iraq since the end of the US occupation in 2011 came after militants seized a dam and forced a mass exodus of religious minorities.
The news pushed up oil prices as investors feared possible supply disruptions in the crude-rich country.
Wall Street stocks managed to shake off the gloom, with the Dow Jones Industrial Average advancing 0.44 percent to 16,439.86 in mid-afternoon trading.
The broad-based S&P 500 gained 0.36 percent to 1,916.51, while the tech-rich Nasdaq Composite Index 0.27 percent at 4,346.47.
European equity markets had already been spooked by tit-for-tat sanctions between Russia and the West over the Ukraine crisis and investor unease over the bloody conflict between Israel and Palestine.
"The rate by which investors are fleeing out of stocks is speeding up as geopolitical tensions continue to increase," said Markus Huber, senior analyst at brokers Peregrine & Black.
In corporate news, shares in Banca Monte dei Paschi lost nearly 12 percent after its second quarter results revealed a big rise in charges for souring loans.
The news weighed on Italian banking shares and added to concern about the outlook for the economy, which sank into recession in the second quarter.
In foreign exchange trading, the euro climbed to $1.3409 from $1.3363 late in New York on Thursday.
The single currency had slumped to $1.3333 on Wednesday, its lowest level for nine months.
The euro meanwhile hit a near nine-month low against the Japanese currency on Friday, at 135.73 yen. It later recovered to 136.62 yen, which compared with 136.42 yen late on Thursday.
It also rose to 79.96 pence from 79.38 pence on Thursday. The pound slipped to $1.6774 from $1.6832.
On the London Bullion Market, the price of gold rose to $1,309.75 an ounce on Friday from $1,305.25 Thursday.


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