Volkswagen share drop hurts German stock market

Frankfurt's stock market fell Wednesday, hit by another plunge in Volkswagen's share price, although gains for the Paris index helped push eurozone share prices overall to multi-month highs.
US stocks opened higher, continuing to benefit from upward momentum following a jump in the Chinese stock market.

In early trading, the Dow Jones Industrial Average climbed 0.15 percent to 17,944.84 points.

But gloom continued to weigh on Volkswagen shares, which slumped by more than ten percent in early deals, recovering only slightly by the afternoon to show a loss of 8.6 percent at 101.50 euros.

The German car giant on Tuesday said an internal probe had found that 800,000 more vehicles showed "inconsistencies" on carbon emissions amid an already massive pollution cheating scandal.

Frankfurt's DAX 30 index was down 0.20 percent at 10,929.23 points in mid-afternoon trading.

"The main source of the DAX’s misery, which has left the index struggling to gain any traction, has been Volkswagen," said Connor Campbell, analyst at Spreadex trading group.

By contrast, London's benchmark FTSE 100 index jumped 1.04 percent to 6,450.12, and in Paris the CAC 40 won 0.86 percent to 4,978.72.

"Having gained three days from three this week, European shares broke to a fresh two-and-a-half month high on Wednesday," noted Jasper Lawler, analyst at CMC Markets trading group.

The Euro Stoxx 50, the eurozone's benchmark index, hit 3,472 points -- the highest level since August 19 -- before cooling slightly. It stood at 3,462.95 in mid-afternoon, a gain of 0.6 percent on the day.

"Markets have been enthused by another big hint of further monetary stimulus from ECB president Mario Draghi while at the same time seeing better than expected service sector and manufacturing data this week," Lawler said.

The prospect of more stimulus didn't help the euro, however, which slid to $1.0890 from $1.0959 late on Tuesday in New York.

In London on Wednesday, shares in Marks and Spencer rallied 3.27 percent to 537.5 pence after the clothing-to-food retailer posted sliding first-half net profit on tumbling clothes sales and a poor international performance.

M&S, regarded as a barometer of UK consumer demand, said performance was dogged by the company's decision to avoid discounting, while rainy weather also dampened demand as shoppers avoided the British high street.

In Asia, Tokyo's benchmark Nikkei 225 index closed up 1.3 percent on Wednesday as Japan Post shares skyrocketed in their long-awaited market debut.

Shares in the vast company -- along with its banking and insurance units -- were listed on the Tokyo Stock Exchange following an $11.5 billion share sale, in the largest offering globally since Chinese e-commerce giant Alibaba's record $25-billion initial public offering last year.