Europe’s stock markets dropped sharply yesterday after the European Union said it was studying a possible Greek debt ‘rescheduling.’
London’s benchmark FTSE 100 index of top shares ended down 1.55 per cent at 5,765.80 points, while in Frankfurt the DAX fell 1.25 per cent to 7,069.90 points and in Paris the CAC 40 dropped 1.90 per cent to 3,805.09 points
Prior to the announcement, markets had been mostly rising despite weak British manufacturing data and Toyota unveiling a disappointing profits forecast.
International backers of a second bailout plan to ward off the threat of Greece defaulting on its massive debts are now studying a possible “rescheduling,” the European Commission said yesterday.
British manufacturing output was hit in April by the royal wedding and Japan’s tsunami disaster. Workers were given a day off on April 29 to celebrate the wedding of Prince William and Kate Middleton, while Japan’s natural disaster meant vital parts could not be sent abroad to Britain, hitting production.
Manufacturing output is suffering across the West as factories produce less amid slack demand for goods.
Japanese auto giant Toyota said it expected annual net profit to drop 31 per cent to $3.5 billion on a strong yen and the effect on production of Japan’s recent natural disasters.
Shares in European car giants were also down.
In Germany, BMW dropped 0.94 per cent to €62.34, Daimler fell 1.78 per cent to €46.58 and Volkswagen slid 1.53 per cent to €125.55.
In France, shares in Peugeot dropped 3.34 per cent to €27.46 on a ratings downgrade by HSBC, traders said.
Elsewhere in Europe, Swiss stocks slid 1.18 per cent, Brussels fell 1.59 per cent and Madrid tumbled 1.69 per cent.
US stock markets opened firmly in the red Friday and by 1600 GMT the Dow Jones Industrial Average was down 1.16 per cent at 11,983.77 points.
The broader S&P 500 lost 1.14 per cent to 1,274.33 points, while the tech-rich Nasdaq Composite gave up 1.22 per cent to 2,652.12 points.
Asian markets closed mixed yesterday after the Dow in New York rose for the first time in six sessions overnight but a rate hike in South Korea and persistent fears over tightening in China kept dealers nervous.
The region was given an upbeat lead from New York, where markets were higher after the US trade deficit unexpectedly narrowed in April thanks to a recovery in exports and a dip in imports.