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LONDON: European stock markets closed sharply lower Wednesday, hit
by concerns over the health of the banks while falling oil prices
put pressure on the energy majors and mining companies.
Dealers said growing speculation that the banks
face more losses on their exposure to the US subprime or high-risk
home loan crisis rattled sentiment, with US investment bank giant
Lehman Brothers in the spotlight.
Among the banks, home loan lender Alliance &
Leicester bucked the trend, rising 3.06 percent at 412.50 pence
after a report that US investment group TPG planned to make an
investment in the company.
In Paris, dealers said continued concerns over
the banks on the Lehman Brothers’ lead and the latest weak
eurozone data hit sentiment.
At the same time Wednesday, gains in the dollar
kept oil prices sliding from recent record highs of $135, sparking
heavy losses in the energy sector and stoking the view the
commodities run-up could possible be coming to an end.
An uncertain start on Wall Street after heavy
losses on Tuesday left European markets without a positive lead
although US stocks picked up later.
In London, the FTSE 100 index fell 1.45 percent
to 5,970.10 points. In Paris, the CAC 40 shed 1.38 percent to
4,915.07 points and in Frankfurt the Dax lost 0.77 percent to
6,965.43 points.
The Euro Stoxx 50 index of leading eurozone
companies lost 1.02 percent.
The euro was at $1.5448 while oil was down $1.58
to $122.73.
In Asia on Wednesday, Japanese shares gained
1.59 percent as the stronger dollar helped boost the exporters while
Hong Kong lost 1.04 percent and Sydney was narrowly mixed.
On Wall Street, shares rebounded from early
losses after a slightly better-than-expected services sector survey
helped steady nerves.
The Dow Jones Industrial Average was up 0.09
percent at around 1715 GMT.
The Institute for Supply Management (ISM) survey
for May slipped to 51.7 percent in May from 52 percent in April but
was well above forecasts for a reading of 51.
Lower oil prices helped some in the market but
the pressure from rising fuel prices was seen as United Airlines,
America’s second-biggest domestic airline, announced it was
cutting flights and jobs.
The announcement saw United Airlines shares up
4.3 percent at $8.90.
In Frankfurt, the banks were similarly under
pressure, with Deutsche Bank down 0.97 percent to 66.45 euros while
home loan specialist Hypo Real Estate fell 2.09 percent to 20.15
euros.
After a sharp fall in US auto sales reported
Tuesday, Daimler was down 1.02 percent at 47.50 euros and Volkswagen
slipped 0.21 percent to 172.55 euros.
Among the few gainers, Lufthansa was up 2.84
percent on hopes fuel prices will ease.
Elsewhere in Europe, the Bel-20 in Brussels was
down 0.13 percent, the Ibex-35 in Madrid shed 0.67 percent,
Italy’s Mib-30 tumbled 1.44 percent, the AEX 25 in Amsterdam was
down 1.10 percent and the Swiss Market Index fell 1.12 percent.
-- AFP
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