German shares fell sharply on Wednesday, as growing concerns about Greece, Spain and Italy coupled with news that China has no plans to introduce large-scale stimulus measures curbed appetite for risk.
Italian and Spanish bond yields climbed sharply today after the European Central Bank blatantly rejected Spain's plan to recapitalize the troubled lender Bankia using sovereign bonds.
The Italian Treasury sold 3.391 billion euros in 5-year bonds at a debt auction, short of its maximum target, as the 10-year government bond yields broke the 6 percent danger level amid concerns about Greece leaving the euro zone.
Investors sentiment also took a hit after data showed eurozone economic confidence declined more than expected to 90.6 in May from revised 92.9 in April, according to survey results from the European Commission. Economists were forecasting the index to drop to 91.9.
The industrial confidence deteriorated to -11.3 in May from -9 in April, while services confidence came in at -4.9, down from -2.4 in the prior month.
Commodities such as crude and copper retreated over a percent each and the euro touched a 23-month low versus the dollar, pressured by continued worries about the eurozone.
The benchmark German DAX is currently down 67 points or 1.05 percent at 6,329, while France's CAC 40 is losing 1.38 percent, the U.K.'s FTSE 100 is down 1.37 percent and Switzerland's SMI is edging down a modest 0.16 percent.
The Euro Stoxx 50 index of eurozone bluechip stocks is declining 1.23 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is down 1.1 percent.
Deutsche Boerse AG is down half a percent on saying it would buy back shares worth approximately EUR 100 million until the end of July.
Postal and logistics firm Deutsche Post DHL is declining a percent. The company said it has received a demand asking it to repay state aid including interest in the amount of 298 million euros.
Retail and wholesale group Metro Group is gaining 1.8 percent after U.K.'s food wholesaler Booker Group agreed to acquire the German firm's Makro cash and carry chain in the U.K.
In economic releases, eurozone money supply growth slowed unexpectedly in April, data published by the European Central Bank showed. M3 grew at a pace of 2.5 percent from a year ago following a 3.1 percent rise in March. Economists were expecting the annual rate to rise to 3.4 percent.
Elsewhere, Asian shares posted broad-based losses, as reports quashing speculation of large-scale investment stimulus measures in China and the ECB's rejection of Spain's plan to recapitalize troubled lender Bankia through a 19 billion euro 'backdoor bailout' prompted investors to adopt a cautious stance.
The Dow futures point to a retreat on Wall Street following the previous session's rally despite disappointing data on consumer confidence and the Dallas Fed activity index.
by RTT Staff Writer
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