Arab Today, arab today european equities slide on dire eurozone data
Last Updated : GMT 09:50:34
Arab Today, arab today
Arab Today, arab today

European equities slide on dire eurozone data

Arab Today, arab today

Arab Today, arab today European equities slide on dire eurozone data

London - AFP

European stocks and the euro fell on Thursday on dismal eurozone manufacturing figures, making a downbeat start to September after an extremely volatile August which was haunted by shadows of global recession. London\'s FTSE 100 index of leading shares slid 0.50 percent to 5,367.81 points in late morning trade, while Frankfurt\'s DAX 30 shed 1.89 percent to 5,676.83 points and in Paris the CAC 40 lost 1.14 percent to 3,218.18. In foreign exchange deals, the European single currency sank to a two-week low point of $1.4263. It later pulled back to $1.4282, down from $1.4374 late in New York on Wednesday. Eurozone manufacturing hit reverse gear in August, with a closely-watched survey signalling a two-year low in industrial activity. The eurozone manufacturing purchasing managers\' index (PMI), compiled by Markit, logged 49.0 points in August, down from 50.4 in July. Any score below 50 indicates contraction, while anything above suggests expansion. \"The beginning of the month, usually marked by the inflow of new money into the markets resulting in higher performance, has bestowed a rather disappointing picture upon investors,\" said ETX Capital trader Anita Paluch. \"European shares fell after a wave of weak PMI readings across Europe pointing to a slowdown in economic activity.\" Only Germany, the Netherlands and Austria posted indications of manufacturing sector economic growth, with France, Italy and Spain slumping into negative territory. Data earlier Thursday showed China\'s official PMI rose to 50.9 in August from 50.7 the previous month, which was the lowest in more than two years. \"Even the data coming from China, although giving some reassurance about the pace of growth and signaling stabilization in the Chinese manufacturing sector, did not offer much support for Europe, as the new export orders were on the weaker side, meaning less export for economies dependent on export to China -- like Germany,\" Paluch added. She added that Frankfurt was also hit by a flurry of broker downgrades for Allianz, BASF, EON and RWE, as well as carmakers BMW, Daimler and Volkswagen. Traders were meanwhile on tenterhooks before publication of Friday\'s crucial non-farm payrolls report in the United States. Wall Street had gained ground on Wednesday, boosted by better-than-expected data on manufacturing in the country\'s industrial heartland, while still ending August with losses. The Dow Jones Industrial Average added 0.46 percent in value -- but still finished last month with an overall loss of 4.4 percent. Traders suffered a volatile month in which markets were rattled by the debt-ceiling mess in Washington, Standard & Poor\'s downgrade of the United States, fears of a new global recession and Europe\'s sovereign debt crisis. Markets won a partial boost after the US Federal Reserve pledged on August 9 to hold near-zero interest rates for at least two years, to help the nation\'s struggling economy. \"August was a bumpy and volatile month for equity markets as investors worried about the US debt ceiling debate and US credit rating downgrade,\" VTB Capital economist Neil MacKinnon told AFP. \"In addition, the eurozone debt crisis showed no sign of any early resolution with investors worried about the threat of a banking crisis. \"And on top of that, economic indicators for the major economies started to flash red as the risk of so-called \'double-dip\' recession increased.\" Meanwhile, expectations of some sort of stimulus have been building since last week when Fed chief Ben Bernanke said the central bank would not immediately begin monetary easing -- but would keep the door open for such a move when needed. But Bernanke offered no new Fed stimulus measures in his speech at a central bankers\' conference in Jackson Hole, Wyoming, last Friday. Then on Tuesday, minutes showed that officials at the central bank\'s rate-setting Federal Open Market Committee (FOMC) meeting on August 9 had raised QE3 as a possibility. \"The recovery in major equity markets from the 9 August low was in response to the FOMC\'s pledge to keep the fed funds rate low until mid-2013 and the markets are hoping that the Fed announces policy easing at the 20-21 September FOMC meeting,\" added MacKinnon. In the previous \"QE\" quantitative easing programmes since the global financial crisis, the Fed injected money into the US economy via Treasury bond purchases.

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Arab Today, arab today european equities slide on dire eurozone data Arab Today, arab today european equities slide on dire eurozone data

 



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