European stocks fall heavily, hit by gloom over growth

GMT 14:26 2014 Friday ,10 October

Arab Today, arab today European stocks fall heavily, hit by gloom over growth

Frankfurt Stock Exchange
London - AFP

European stock markets fell heavily on Friday and the euro was down against the dollar, hit by growing signs that the eurozone economy may be at risk from recession and by gloom over the global outlook.
London's benchmark FTSE 100 index retreated 1.58 percent to stand at 6,330.08 points approaching midday in the British capital.
Frankfurt's DAX 30 index slumped 2.32 percent to 8,796.47 points and the CAC 40 in Paris shed 1.74 percent to 4,069.31 compared with Thursday's closing level.
Madrid lost 1.56 percent, Milan gave up 1.69 percent and Amsterdam dived 2.0 percent.
All Nordic markets were down by about two percent.
Denmark was taking the hardest hit with its main index losing 2.32 percent, compared with a 1.78-percent fall in Sweden, 2.08 percent in Norway and 2.26 percent in Finland.
The euro dropped to $1.2669 from $1.2691 late on Thursday in New York, while global oil prices came under further pressure from weakening demand growth for crude against a backdrop of a solid supply situation.
"It now looks as though investors are nervous about a confluence of factors ranging from worries of a global economic slowdown, an economic crisis with German economic data especially poor, deflation, an unwillingness on the part of German policymakers to adopt fiscal reflation, the impact of Ebola and lurking geopolitical risks," said Neil MacKinnon, economist at VTB Capital financial group.
European stock markets had closed mostly down on Thursday after a cut in the growth forecasts of Germany and following a fresh IMF warning on recession.
International Monetary Fund chief Christine Lagarde said that there was a 35-40 percent chance of the eurozone slipping back into recession if action were not taken to prevent this.
Wall Street stocks had also fallen sharply on Thursday, losing about two percent in a broad sell-off, as the weak economic data from Germany heightened concerns about poor overseas growth.
"Whether traders can see fit to shake off this moribund sentiment remains to be seen, but this line about Germany slipping into recession is simply layering on another level of angst to a market that is already wary of the threat posed by the likes of Ebola in West Africa and Islamic State in the Middle East," said Tony Cross, market analyst at traders Trustnet Direct.
In the currency market, the euro rose to 78.87 British pence from 78.73 pence on Thursday, while the pound slid to $1.6063 from $1.6118.
Official data on Friday showed that Britain's trade deficit for goods narrowed last month.
"The main factor behind the deficit narrowing was not an increase in exports but a large fall in imports from non-EU countries," said the Office for National Statistics.
The price of gold fell to $1,222.27 an ounce on the London Bullion Market from $1,226.75 on Thursday.


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