European markets drop as Syria intervention looms

Customers are seen inside the Body Shop store, owned by L’Oreal, at the So Ouest Shopping Mall in Paris (file). Shares in L’Oreal surged by 3.15% on news that the group, the world’s top cosmetics company, may be looking to buy back Swiss food giant Nestle’s holding.

AFP/LondonEurope’s main stock markets fell yesterday as investors braced for developments on Syria and digested a volley of mixed data before a long weekend in the US. At close, London’s FTSE 100 slid 1.08% to 6.412.93 points, Frankfurt’s Dax 30 fell 1.12% to 8,103.15 points, while the Cac 40 in Paris dropped 1.32% to 3,933.78 points. Milan lost 1.32%. “No one is going to start buying shares before a weekend filled with so much uncertainty on Syria,” said Frederic Rozier of Meeschaert Private Bank. “Everyone’s eyes are fixed on the Middle East,” he said. On the economic front, eurozone unemployment came in unchanged at a record of 12.1% in July but another slight fall in the total jobless offered some hope. Analysts had been hoping the report would begin to reflect a gradual recovery which saw the eurozone post 0.3% growth in the second quarter to finally snap a deep 18-month recession which has destroyed millions of jobs. Martin van Vliet at Global Economics ING said the reports confirm “that the region is in a tentative recovery” but the wider picture remains uncertain. In foreign exchange activity, the European single currency fell to $1.3198 from $1.3241 late on Thursday. The dollar slipped to ¥98.19 from ¥98.32. Sterling firmed to 85.31 pence for a euro, but slipped against the dollar to $1.5470. The mining and energy sector took a hit, as gold and oil prices shed recent gains. World oil prices pulled back from recent peaks as fears eased of a military strike against Syria over its alleged use of chemical weapons. And gold prices slid to $1,394.75 per ounce, having soared on Wednesday to $1,433.83 — the highest level since May 14 — as investors flocked to the safe-haven metal amid heightened worries over Syria. In reaction to lower oil prices, shares in French oil group Total dropped 1.40% to €41.92 in Paris. In London, British energy giant BP slid 1.42% to 446.20 pence. Gold producers also took a modest hit from falling prices for the precious metal. On the upside in Paris, shares in L’Oreal surged by 3.15% on news that the group, the world’s top cosmetics company, may be looking to buy back Swiss food giant Nestle’s holding. The stock surged to €126.25 on the Paris stock exchange. In the US, Wall Street fell slightly at midday with the Dow Jones Industrial Average off 0.36% and tech heavy Nasdaq each down 0.69% as traders looked forward to a long Labour Day weekend.