European shares fall to one-month closing low
European shares fell sharply for a second day yesterday with banks sliding, miners suffering from lower metals prices and reports they face higher taxes, and after US data cast further doubt on the economic recovery. The FTSEurofirst 300 index of top...
European shares fell sharply for a second day yesterday with banks sliding, miners suffering from lower metals prices and reports they face higher taxes, and after US data cast further doubt on the economic recovery.
The FTSEurofirst 300 index of top European shares fell 1.6 per cent to 1,036.07 points, its lowest close since December 22.
The European benchmark is still up more than 60 per cent from its lifetime low of March 9.
Around Europe, Britain's FTSE 100 index Germany's DAX index and France's CAC 40 ended the day between 1.6 and 1.8 per cent lower.
Miners were among the biggest fallers. The Sydney Morning Herald newspaper reported that a review of Australia's tax system had recommended a levy that would hit mining firms.
Gold fell two per cent as the dollar rose to a six-month high against the euro, and other metals, including copper, fell.
Anglo American, BHP Billiton, Fresnillo, Kazakhmys, Rio Tinto, Vedanta and Xstrata fell between 3.1 and 6.2 per cent.
The number of US workers filing new applications for jobless insurance unexpectedly rose last week, and the Philadelphia Federal Reserve Bank said its business activity index slipped in January to 15.2 from 22.5 in December.
The negatives more than outweighed the benefits of some strong earnings. Goldman Sachs Group Inc posted profit ahead of analyst forecasts.
"The Fed Phil was worse than expected, and it seems there's a problem with the labour market, so it was a combination of the two," said Heino Ruland, strategist at Ruland Research, in Frankfurt.
"With the earnings, if the numbers aren't much better than expected, there's going to be profit-taking." Banks took most points off the index.
As European markets were closing, President Barack Obama vowed to rein in the biggest US banks, proposing new limits on their trading practices and their ability to become too large.
BNP Paribas, Banco Santander, Barclays, HSBC, Lloyds Banking, Société Générale and Standard Chartered fell between 1.2 and 5.9 per cent.
Wall Street was lower around the time European bourses were closing. The Dow Jones, S&P 500 and Nasdaq Composite were down between 1.3 and 1.7 per cent.
Some drugmakers were among the few gainers, with AstraZeneca up one per cent after an upgrade at Morgan Stanley, which upped target prices across the sector.
Novartis and Roche rose 1.2 and 0.5 per cent respectively.
Among individual shares, Enterprise Inns soared 19.6 per cent after it said the rate of decline at its pubs had slowed.