Major European Markets Head South

[News]

1/28/2005 12:24:53 PM Friday, the major European markets slipped back, after a report from the U.S. Commerce Department showed that the U.S. GDP rose at an annual rate of 3.1% in the fourth quarter compared to the 4.0% growth seen in the third quarter. Economists had expected a more modest slowdown to about 3.5% growth. The dollar strengthened against the euro, while the crude prices retreated. The mining and oil stocks led the downside.

Crude prices for March delivery were trading near $47.40 a barrel, easing back from $50 a barrel yesterday. The dollar initially weakened against the euro to trade at $1.3080 per euro, but rallied back to trade near $1.3040 per euro.

In London, the FTSE 100 index shed 20.60 or 0.42% to close at 4,832.80. Miners Anglo American, BHP Billiton and Rio Tinto declined, but Antofagasta bucked the trend with a gain of 1.42%. Oil majors Shell, Cairn Energy and BP registered losses. Bankers Barclays, HSBC Holdings and Standard Chartered Bank slipped, but Royal Bank of Scotland advanced marginally.

Drugmakers AstraZeneca and Shire Pharmaceuticals moved up, but GlaxoSmithKline was languishing. Air carrier British gained 0.97% with crude prices retreating. Anglo-American fund manager Amvescap surged 4.61% on speculation that French bank Societe Generale would make an offer for the firm. Another speculation that logistics firm Exel may be a take-over target by U.S. rival UPS boosted its stock to rise 2.01%. Private equity firm 3i Group gained 2.60% while packing materials manufacturer Rexam moved up 1.49%.

The CAC 40 index in Paris lost 21.05 points or 0.54% to end at 3,870.35. Steel major Arcelor was down 0.82%, while oil giant Total slipped 0.54%. Computer services firm Cap Gemini and semiconductor manufacturer STMicroelectronics shed 0.25% and 1.26% respectively. Financial services providers AGF, AXA, BNP Paribas, Credit Agricole and Dexia registered losses. Drugmaker Sanofi-Aventis and building materials firm Saint-Gobain declined.

Aerospace and defense company EADS gained 0.26%, while automakers Peugeot and Renault rose 1.63% and 0.65% respectively.

In Frankfurt, the German DAX index closed at 4,201.81, losing 14.60 points or 0.35%. Engineering group Siemens dropped 3.90% after its rating was cut to "sell" from "buy" by Landesbank Baden-Wuerttemberg, expressing uncertainty over its loss-making mobile phone unit. Automakers BMW, DaimlerChrysler and Volkswagen declined. Chemical manufacturers BASF and Henkel shed 0.86% and 0.26% respectively, while Bayer moved up 0.77%.

Drugmaker Fresenius Medical gained 1.58%, but peers Schering and Altana were languishing. Air carrier Deutsche Lufthansa rose 1.18% with crude prices declining. Steel major Thyssen Krupp, tire maker Continental and enterprise software giant SAP registered losses.