Europe lower as global stock slide continues

Europe lower as global stock slide continues
By Neil Dennis
Copyright The Financial Times Limited 2007
Published: February 28 2007 10:32 | Last updated: February 28 2007 12:04


European equity markets put in another downbeat performance as the global sell-off continued, but losses were capped as US futures trade indicated a strong opening rally on Wall Street.

By midday, the FTSE Eurofirst 300 recovered from its early 2 per cent decline to stand 0.8 per cent lower at 1,494.37. Frankfurt’s Xetra Dax fell 0.8 per cent to 6,764.22, the CAC 40 in Paris shed 0.7 per cent to 5,548.15 and London’s FTSE 100 slid 0.8 per cent to 6,235.2.

Eon, the German utility fell 4.2 per cent to €98.86 after further doubts were cast on its €41bn bid to takeover Spain’s Endesa. Italian power generator Enel jumped into the fray after it purchased 10 per cent of Endesa shares and added that it could lift its stake to 24.99 per cent.

European emerging markets were hit for a second successive session as investors lowered their exposure to risk. Turkey’s Istanbul share index fell 2 per cent, while Russia’s RTS index was off 2.1 per cent.

Most stocks with gearing to emerging markets were lower, but Raiffeisen International, the Austrian bank which owns assets across Russia and eastern Europe, recovered from its early sharp fall to stand 0.5 per cent higher at €103. EFG Eurobank, the third-largest Greek bank which has exposure through its Turkish assets, fell 1.1 per cent to €28.10.

Greece’s second-largest lender Alpha Bank fell 4 per cent to €22.84 after reporting 24.6 per cent full-year profit growth, falling just shy of expectations, and forecast intensifying competition in its retail credit division.

Elsewhere in Greece, Bank of Piraeus fell 2.9 per cent to €25.82.

Swiss bank Julius Baer, the best performing stock on the SMI index this year, fell 3.4 per cent to SFr154.70. Rival Swiss wealth manager EFG reported a near doubling of full-year net profit and raise its targets. Its shares added 1.6 per cent to SFr45.80.

Munich Re, the German reinsurer, fell 2.1 per cent to €122 after it posted record full-year earnings of €3.536bn, but added that it expected a “general tendency towards a somewhat softer market”.

French construction group Eiffage missed market expectations with its full-year operating profit, but raised its dividend. The shares fell 0.8 per cent to €76.52.