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Wednesday, March 22, 2023

Europe debt fears hit stocks in US

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The FTSE Index fell 11 points to 5539.3 by mid-afternoon

US stocks have mirrored a decline on European markets as fears over the eurozone’s debt crisis spread across the Atlantic.

Wall Street’s Dow Jones Industrial Average fell nearly 1% in early trading after a report revealed a drop in US home prices in September.

The FTSE 100 Index lost earlier gains and fell 11 points to 5539.3 by mid-afternoon. European stocks also moved lower, with Germany’s DAX down 0.5% and the CAC-40 in France sliding more than 1%.

Investors continued to dwell on the escalating debt crisis in Europe and concerns that Portugal – or even Spain – will follow Ireland and seek a substantial financial bailout from the European Union.

The anxiety also led to a further spike in government bond yields – an important indicator of confidence – as investors rushed to sell them.

Traders again ditched the euro – which fell against most major currencies – as they put their cash into safer investments such as the US dollar.

The retreat to the greenback saw its value rise and led to a drop in commodity prices, which hit mining and energy stocks.

Kazakhmys was down 20p at 1375p, Xstrata lost 14.5p at 1282p and Vedanta Resources was off 21p at 1989p.

Banks, which have been hit hard in the wake of the Irish crisis, lost earlier gains, with Lloyds down 0.2p at 60.4p and Royal Bank of Scotland dropping 0.8p to 37.8p.

In corporate news, shares in school trips and hotel breaks firm Holidaybreak jumped nearly 9% after it posted a 9% rise in full-year profits and announced the acquisition of 50% of student accommodation firm Meininger.

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