Supermarket groups topped the FTSE 100 fallers yesterday after Sainsbury posted weak first-half results. Shares in Sainsbury tumbled 7.0% to 234 pence and Tesco shed 3.2% to 180.20 pence, while peer Morrison dropped 5.0% to 159.90 pence.
AFP
European stocks fell yesterday following disappointing data released on the eve of a key eurozone interest rate call, with investors also nervous over pro-democracy protests in Hong Kong.
London’s benchmark FTSE 100 index slumped 0.98% to end the day at 6,557.52 points, Frankfurt’s DAX index shed 0.97% to 9,382 points and in Paris the CAC 40 tumbled 1.15% to 4,365.27 points.
Milan dropped 0.89% and Madrid gave up 0.67%.
“Markets didn’t get the first quarter off to the strongest of starts today,” said CMC Markets UK analyst Jasper Lawler. “The recent pull back in stock prices continued on signs that the US economy may be getting dragged down by slowing growth in other corners of the globe,” he added.
The euro retreated to $1.2613 from $1.2631 late Tuesday, hit partly by lacklustre eurozone manufacturing activity in September on the eve of the ECB decision.
The latest survey of leading indicators from manufacturing industries in the eurozone, the purchasing managers’ index (PMI), gave a reading of 50.3 points, down from 50.7 points in August and the lowest for 14 months.
The data sparked speculation that ECB chief Mario Draghi could unveil fresh stimulus measures.
“Mario Draghi will be the centre of attention at the ECB meeting tomorrow (Thursday) with markets betting on him to reveal the extent of quantitative easing to be taken up,” said dealer Amir Khan at traders CurrenciesDirect. “The US dollar however continues to retain strength as last week’s GDP (gross domestic product) numbers were better than expected.”
The euro had plunged on Tuesday to $1.2571 - last seen in early September 2012 - as eurozone inflation fell to a five-year low of 0.3% in September, signalling that the ECB may need more action to avert deflation.
In London yesterday, supermarket groups topped the FTSE 100 fallers board after Sainsbury posted weak first-half results.
Adding to the gloom, rival Tesco revealed that Britain’s Financial Conduct Authority regulator had launched a probe into the troubled supermarket chain after it massively overestimated its half-year profits forecast.
Shares in Sainsbury tumbled 7.0% to 234 pence and Tesco shed 3.2% to 180.20 pence, while peer Morrison dropped 5.0% to 159.90 pence.
On the eurozone bond market, French 10-year yields slid 1.242%, down from 1.285% on Tuesday despite a budget statement which took a gloomy view of the outlook for deficit reduction and economic growth.
Meanwhile, Germany placed 10-year bonds at the lowest yield ever, at less than 1.0% for the first time, at 0.93%.
The dollar meanwhile extended its run-up despite weak US indicators, climbing to ¥110.09—its highest since August 2008 - as investors bet on an early rate rise by the US Federal Reserve as the economy picks up pace, while the Bank of Japan mulls easing measures to jumpstart growth at home.
However, it later pulled back to sit at ¥109.36 in London, against ¥109.64 late on Tuesday.
The euro eased to 77.81 pence from 77.90 pence late on Tuesday, when it had hit a July 2012 low of 77.66 pence. The pound edged up to $1.6214 from $1.6213.
On the London Bullion Market, the price of gold finished unchanged at $1,216.50.
