European equities closed sharply lower yesterday, following large losses in Asia and overnight on Wall Street, as concerns grew over weak global economic data.
London’s benchmark FTSE 100 index of top shares fell 1.36 per cent to 5,847.92 points, while in Frankfurt the DAX lost 1.99 per cent to 7,074.12 points and in Paris the CAC 40 tumbled 1.89 per cent to 3,889.87 points.
In foreign exchange deals, the European single currency rose to $1.4420 from $1.4331 in New York late Wednesday.
“Worry is creeping in amongst the ranks of investors as the raft of economic data sets alarms bells over the state of the global economy ringing,” said Capital Spreads analyst Simon Denham.
Traders in the United States went into sell-off mode on Wednesday as they digested miserable data suggesting the world’s number one economy is stalling, with the Dow diving 2.22 per cent, its worst performance in several months.
“Not only did the realisation that the global economy is starting to slow contribute to the selloff ... but a further downgrade to Greece compounded the situation,” added Mr Denham.
Markets were dealt a body blow after Moody’s rating agency again downgraded Greek debt and gave it a negative outlook, raising the stakes in rescue negotiations for the troubled eurozone member nation.
“It’s the same old concerns that have sent jitters through investors on various occasions this year – worry about the stability of the economic recovery and just how much worse than expectations the US unemployment numbers will be (on Friday),” said IG Index analyst Anthony Grech.
Elsewhere in Europe, Madrid closed down 0.76 per cent, Milan was off 0.79 per cent, Swiss stocks gave up 0.89 per cent and Amsterdam dropped 1.54 per cent.
Lisbon bucked the trend to gain 0.57 per cent. On Thursday, US financial stocks were hit by news that Goldman Sachs had received a subpoena from prosecutors probing the financial crisis and a Moody’s warning that credit ratings at other banks could be downgraded.
Investors were also mulling a weaker-than-expected dip in jobless claims.
At 1600 GMT, the Dow Jones Industrial Average was down 0.58 per cent to 12,218.43 points. The broader S&P 500 index fell 0.61 per cent to 1,306.50 points, while the tech-rich Nasdaq Composite was off 0.17 per cent at 2,764.48 points.
Asian shares tumbled yesterday, following heavy losses on Wall Street as more poor US data hit sentiment.
Japan was also weighed by political uncertainty as Prime Minister Naoto Kan faced a vote of no-confidence, adding to investor nervousness about the already struggling economy.
Tokyo slumped 1.69 per cent, Seoul sank 1.27 per cent and Sydney dived 2.27 per cent, two days after official data showed that Australia’s economy was hit by its heaviest contraction for 20 years in the first three months of 2011.
Asian shares were also hit by manufacturing data pointing to an easing in the region’s leading emerging economies, with the purchasing managers’ indices in China, India, South Korea and Taiwan showing slower growth.
Elsewhere, Hong Kong shed 1.58 per cent and Shanghai lost 1.40 per cent as the global sell-off gathered pace.
In London on Thursday, the euro changed hands at $1.4420 against $1.4331 in New York late on Tuesday, at 116.70 yen (116.01), £0.8836 (0.8770) and 1.2164 Swiss francs (1.2060).
The dollar stood at 80.93 yen (80.92) and 0.8436 Swiss francs (0.8415).
The pound was at $1.6317 (1.6340).On the London Bullion Market, gold prices firmed to $1,540 an ounce from $1,534 late Tuesday. (AFP)