The relentless fall in European markets continued, writes Nick Fletcher, as investors worried about the eurozone economy after the week’s poor figures from Germany and comments from ECB president Mario Draghi that the recovery was running out of steam. And although the US market managed to edge higher in early trading, it was not a convincing rise after the 2% decline on Thursday. So the final scores showed:
The FTSE 100 finished 91.88 points or 1.43% lower at 6339.97
Germany’s Dax dropped 2.4% to 8788.81
France’s Cac closed down 1.64% at 4073.71
Italy’s FTSE MIB fell 0.94% to 19,200.97
Spain’s Ibex ended 1.2% down at 10,150.5
In the US, the Dow Jones Industrial Average is currently 88 points or 0.5% higher.
On that note, it’s time to close up for the evening. Thanks for all your comments and we’ll be back tomorrow.
Here’s a cautionary tale for anyone eating at their desk and spilling crumbs all over the floor (ahem...), staff at UBS’s offices in London are fighting off an invasion of mice.
Financial News reports:
UBS is looking for a cat with a large appetite, as staff struggle to control a mouse infestation inside its London office.
A number of people at the bank have told Financial News that they have seen mice scamper across desks, run past client meeting rooms and hide in draws.
Two people inside the 100 Liverpool St office blamed nearby construction work as the cause of the rodent invasion, with digging for Europe’s biggest construction project, Crossrail, “forcing them [mice] into surrounding buildings”.
“One mouse went into a managing director’s draw and ate his nuts, while another ran over an MD’s foot and she screamed while on a call,” said one ex-employee, who recently left the bank....
Fears over a looming eurozone recession, the wider global economy, the Middle East turmoil and Ebola have all help to drive stock markets down across Europe and Asia.
The FTSE 100 is down 66 points at 6365, and on track for a new one-year closing low. Earlier it fell as low as 101 points.
Earlier, the Japanese Nikkei shed 1.1% and Australia’s market suffered its biggest one-day loss in 15 months.
Analysts say that “negative sentiment is rife” in the markets today, although the falls do not, yet any, constitute a crash.
H2O Markets’ chief market strategist, Mike Jarman, sums up the mood:
“The economic cycle has stalled, European macroeconomic data is starting to slow and the U.S. is in a hold position as investors continue to digest the tightening cycle and what it means for future growth prospects”
ETX Capital pointed to four key factors, particularly yesterday’s alarmingly weak German exports (down 5.8% in August)
Weak German export data raised fears yesterday that Europe’s Economic turmoil could drag down the Global economy.
Economic sanctions on Russia are halting Germany’s growth and in turn the Euro zone, causing US and Asian shares to go into meltdown last night.
The mood in Germany was further darkened by rumour that the Berlin government will cut its growth forecasts next week.
In other news...
The Bank of England has released details of its contingency plans for if Scotland had voted for independence
A couple of dates for the diary... the Bank of England has announced that it will release the results of its stress tests of UK banks on 16 December, at 7am GMT sharp.
And the eagerly-awaited eurozone stress tests, and asset-quality review, is due on Sunday 26 October.
Those results will show which banks need to raise more capital to protect themselves from future losses, and could shake out so-called ‘’zombie banks’ from the eurozone....
Bank of England to release bank stress test results on December 16. Merry Christmas everyone!
And Matthias Heisse, managing partner in Munich for law firm Eversheds, pins the blame firmly on other countries - for not buying more of Germany’s goods:
“Exports have always been the backbone of the German economy but are of course dependant on buyers with money and foreign markets. Many eurozone countries are still in crisis and the economic sanctions against Russia did not support German exports.
Nevertheless, future prospects still remain broadly encouraging. The labour market seems to be very stable and domestic demand for goods could well rise, due to the minimum wage. Ultimately, it is exports, not the German economy, that is crumbling.”
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