Arab Today, arab today volkswagen scandal hit europe stocks
Last Updated : GMT 20:40:10
Arab Today, arab today
Arab Today, arab today

Standard Chartered slump

Volkswagen scandal hit Europe stocks

Arab Today, arab today

Arab Today, arab today Volkswagen scandal hit Europe stocks

Standard Chartered
London - Arab Today

Disappointing results from Britain's emerging markets bank Standard Chartered and the mushrooming scandal at Germany's troubled automaker Volkswagen sent European stock markets sliding on Tuesday.

StanChart revealed that it sank into the red in the third quarter with an unexpected pre-tax third-quarter loss of $139 million, and outlined surprise plans to raise $5.1 billion in fresh capital to bolster its finances.

Volkswagen meanwhile faced new accusations in the ever-widening emissions cheating scandal, but the German auto giant adamantly denied the new charges.

"Sentiment (was) dominated by the return of the Volkswagen story and the surprise bringing forward of a rights issue by Standard Chartered Bank after the bank slumped to a surprise Q3 loss," said analyst Michael Hewson at traders CMC Markets.

In mid-afternoon trading London's FTSE 100 index of top blue-chip companies had slipped 0.05 percent to 6,358.92 points.

In the eurozone, Frankfurt's DAX 30 shed 0.40 percent to 10,906.80 points and the Paris CAC 40 dipped 0.10 percent compared with Monday's close to stand at 4,911.07.

In foreign exchange activity, the European single currency slid to $1.0963 from $1.1014 late in New York on Monday.

StanChart shares slumped 9.63 percent to stand at 644.90 pence in mid-afternoon trading in London, after the bank also announced plans to axe 15,000 jobs worldwide.
The job losses are part of a major restructuring that will cost around $3.0 billion, the bank said.

"With Standard Chartered announcing a monster rights issue and slashing jobs, investors are heading for the exits in droves," said Mike McCudden, head of derivatives at stockbroker Interactive Investor.
- VW shares in reverse -
Across in Frankfurt, Volkswagen motored to the top of the losers board, after US regulators had accused it late Monday of fitting illegal "defeat devices" into its larger 3.0 litre diesel engines.

The German auto giant, which adamantly denied the new charges, saw its share price nosedive 2.88 percent to 109.45 euros around two hours before the close, having earlier lost five percent.

In an affair that has rocked the automobile sector around the world since it broke in September, the carmaker has already admitted using the software, which skews the results of pollution tests, in smaller 2.0 litre diesels equipped in some 11 million cars worldwide.

But the US Environmental Protection Agency said late Monday it had discovered in its investigation that various six-cylinder 3.0 litre diesel VW Touareg, Porsche Cayenne and Audis had also been rigged with the software.

Meanwhile, Europe's banking sector remained under pressure from the Standard Chartered news.

British peer Barclays slid 1.17 percent to 233.30 pence and Royal Bank of Scotland shed 0.59 percent to 321.20 pence.

Lloyds Banking Group meanwhile dropped 1.21 percent to 74.09 pence.

In Paris, French pair BNP Paribas and Societe Generale saw their shares drop 0.87 percent and 1.52 percent, to stand at 54.87 euros and 42.8 euros respectively.

Deutsche Bank stock slid 0.37 percent to stand at 25.75 euros.
- US shares 'overbought' -
Asian stocks mostly rose on Tuesday on the coattails of global gains the previous day, although concerns about China's slowing growth still lingered.

Sydney closed up 1.42 percent, boosted by a central bank decision to keep the cash rate at 2 percent, while Seoul advanced 0.65 percent and Hong Kong ended 0.89 percent higher.

Shanghai had slipped 0.25 percent at the close.

US stocks opened lower on Tuesday as AIG rejected activist investor Carl Icahn's idea to split up the insurer.

The Dow Jones Industrial Average slid 0.17 percent to 17,798.96 points in the first five minutes of trading.

The broad-based S&P 500 shed 0.31 percent to 2,097.53, while the tech-rich Nasdaq Composite Index fell 0.31 percent to 5,111.42.

AIG chief executive Peter Hancock said Icahn’s proposal to break up the insurer into three companies "did not make financial sense." AIG fell 4.1 percent after reporting a third-quarter loss of $231 million.

Briefing.com analyst Patrick O'Hare said the broader market is "overbought and overdue for a period of consolidation" after huge gains in October.

Source: AFP

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