Thursday, 26 March 2015 18:26
LONDON: European stock markets fell Thursday on concerns over Greek finances and following losses in Asia and on Wall Street in the wake of poorly-received US economic data, traders said.
London’s benchmark FTSE 100 index slumped 1.37 percent to 6,894.88 points around midday in the capital, as traders brushed aside news of a rebound in British retail sales.
Frankfurt’s DAX 30 index shed 1.76 percent to 11,656.15 points and the CAC 40 in Paris lost 1.59 percent to stand at 4,941.35 compared with Wednesday’s close.
Athen’s main index tumbled 3.25 percent.
The euro Thursday rose to a three-week high of $ 1.1052, before standing at $ 1.1020, up from $ 1.0973 late in New York on Wednesday.
“Athens has pledged to draft a set of reforms but we have yet to see any action, and this is fuelling the selloff in London and the eurozone,” said David Madden, market analyst at IG trading group.
“If it wasn’t for the FTSE 100’s large element of energy stocks the losses would be even worse, with the jump in oil providing some brief respite for this embattled sector.”
He added: “Across the English Channel the bounce back in the euro has hindered continental equity markets.”
The governor of the Greek central bank ruled out the country’s exit from the eurozone on Wednesday, and said that Athens was close to reaching a deal on its bailout.
“Grexit is not an option for Greece, it is not an option for the eurozone. It is not going to happen,” Yannis Stournaras told an event in London.
Athens has faced funding difficulties since the EU and IMF refused to release the final tranche of Greece’s 240-billion-euro ($ 260-billion) bailout, after the hard-left government of Prime Minister Alexis Tsipras came to power in January on a platform of reducing austerity.
The euro has come under heavy pressure in recent months, falling to multi-year lows against the pound and dollar on eurozone strains and expectations that the US and Britain would soon raise interest rates.
As the investigation reveals startling information about the crash in the French Alps of a plane from Lufthansa’s low-cost division Germanwings, killing all 150 on board, the airline’s shares fell by more than four percent on Thursday.
The Germanwings co-pilot “deliberately” initiated the descent and refused to open the door to the pilot who was outside the cockpit, the lead investigator said on Thursday. By early afternoon Lufthansa’s shares were down 4.08 percent at 12.83 euros.
Elsewhere, Borse Dubai said it had sold its significant stake in the London Stock Exchange, sending the British group’s share price plunging.
The stake is worth £1.53 billion according to the LSE share price at the close of trading on Wednesday, at 2,538 pence.
In Thursday deals following the announcement, LSE crashed to 2,315 pence, down 8.79 percent on London’s FTSE 100.
Investors have run for the sidelines since Wednesday also after the US Commerce Department said durable goods orders fell in February.
The news will likely put back the US Federal Reserve’s timeline on when to raise interest rates, while fuelling fears about the global outlook according to analysts.
Copyright Reuters, 2015
