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European Stocks Seen Extending Sell-off

European shares may retreat further on Wednesday after yesterday's massive losses following the Easter break, as ongoing fears about euro-zone debt and global recovery fears outweigh a surprise profit for the first quarter from U.S. aluminum giant Alcoa.

Asian markets fell for a sixth day, as Sony and Sharp warned of massive losses and concerns intensified that the European debt crisis is worsening.

The European Commission welcomed Spain's 2012 budget, but said it will need more details, including the regional budgets and healthcare, pensions and employment-related spending to assess the measures announced in Madrid. Meanwhile, Greece is expected to call national elections for May 6, with an official announcement likely today.

In bond auction news, Italy's 12-month and 3-month Treasury Bill auction results are due today, while the German government is aiming to raise a maximum of EUR 5 billion from an auction of 10-year federal bonds.

On the macroeconomic front, retail sales in the U.K. rose in March as unusually warm weather encouraged spending on clothing, footwear and outdoor leisure, a report from the British Retail Consortium revealed. The BRC's monthly sales monitor showed a 1.3 percent year-over-year rise in same-store retail sales, while overall sales, which include stores opened in the past year, were up 3.6 percent against a 1.9 percent decline last year.

In corporate news, French construction giant Bouygues SA said that its subsidiary Bouygues B√Ętiment International has signed an agreement to acquire 100 percent of U.K. contractor Thomas Vale Group.

Bayer AG's Yaz and Yasmin and several other birth-control pills may raise the risk of blood clots in women using the drugs and the danger may be even higher for pills that contain the compound drospirenone, a synthetic hormone, the U.S. Food and Drug Administration said.

Credit Suisse Group AG has hired Chris Gaertner from Bank of America Corp. as managing director and the head of global corporate finance for its technology group based in San Francisco, the Bloomberg said, citing an internal memo.

Telefonica SA will seek shareholder approval in mid-May to pay a scrip dividend and cancel its treasury stock, the Wall Street Journal reported, citing a company spokesman.

Billiton Mitsubishi Alliance or BMA, a joint venture between BHP Billiton and Mitsubishi Corp., plans to cease production at Norwich Park Mine indefinitely as the impact of last year's floods, combined with lower coal prices and high costs, has resulted in an operation that is not currently viable, BMA Asset President, Stephen Dumble said.

European shares hit a 12-week low on Tuesday, dragged down by banks and miners, as fresh concerns about global economic growth and the continued rise in yields of both Italian and Spanish government bonds sapped investor appetite for risk.

The Euro Stoxx 50 index of eurozone bluechip stocks tumbled 3 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, dropped 2.3 percent, while around Europe, Switzerland's SMI, the U.K.'s FTSE 100, the German DAX and France's CAC 40 shed between 1.7 percent and 3.1 percent.

On Wall Street, stocks suffered their biggest declines this year overnight, with the S&P 500 breaking below a key support level, as traders continued to cash in on the recent strength in the markets following last Friday's disappointing jobs report.

Mixed trade data from China, lingering eurozone debt worries and uncertainty about the upcoming earnings season also added to the downside pressure. The Dow fell 1.7 percent to its lowest closing level in over two months and the S&P 500 lost 1.7 percent to set a one-month closing low, while the tech-heavy Nasdaq shed 1.8 percent.

by RTT Staff Writer

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