LONDON (AFP) - European stock markets closed very sharply lower Monday, with losses of more than five percent in many centres as investors sold off on concerns the US economy will fall into recession.
In London, the FTSE 100 index plunged 5.48 percent to 5,578.20 points.
In Paris, the CAC 40 index lost 6.83 percent to 4,744,45 points and in Frankfurt the DAX shed 7.16 percent to 6,790.19 points, with both markets seeing the biggest single day losses since the 9/11 terror attacks.
Dealers said the spark for the global rout was disappointment at US President George W. Bush's tax plan to revive the world's largest economy announced Friday.
After heavy losses in Asian trade, the European markets opened lower and then went lower again in the course of the afternoon as investors opted for safety and took their money out.
Dealers said Bush's remarks did not provide enough good leads to offset all the bad news coming through on the banks as a result of the collapse of the US housing market.
"There is a general nervousness in the markets at the moment over an economic slowdown," said Mark Outten, a trader at GFT Global Markets in London.
London investors are "battening down the hatches" as US recession fears grip the market, according to Richard Hunter, equities analyst at broker Hargreaves Lansdown.
"People aren't buying the US bail-out story and that feeling has been exacerbated by the weakness overnight in the Asian markets," he said.
"The other thing we have seen today is a lack of buying interest -- people are battening down the hatches while they see what happens in the US."
Outside the main markets of London, Paris and Frankfurt, there were also very heavy losses, with Spain down 7.54 percent -- the worst again since the 9/11 induced shock.
No comments:
Post a Comment