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Euro shares plunge on debt fears despite solid numbers; DAX off 0.68%

Published 10/12/2012, 12:13 PM
Updated 10/12/2012, 12:14 PM
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Investing.com - European shares closed lower  Friday, as renewed concerns over global economic growth and the handling of the euro zone's debt crisis overshadowed Thursday's positive U.S. jobless data. 

At the close of European trade, the EURO STOXX 50 fell 0.72%, France’s CAC 40 declined 0.72%, while Germany’s DAX 30 dropped 0.68%. 

Market sentiment had strengthened after the U.S. UoM consumer sentiment rose unexpectedly last month, preliminary data showed on Friday.

In a report, the University of Michigan said that consumer sentiment rose to a seasonally adjusted 83.1, from 78.3 in the preceding month.

Analysts had expected UoM consumer sentiment to fall to 78.0 last month.

However, deep seated concerns over the worsening of the euro zone's debt crisis re-emerged after top economists slashed their growth forecasts for Germany on Thursday, and warned that public support for financial aid for struggling countries was evaporating. 

In addition, German finance minister Wolfgang Schauble rebuked the International Monetary Fund's Christine Lagarde's statement that European leaders should ease demands for tighter austerity in peripheral economies. 

Financial stocks were broadly higher, despite euro zone concerns, as Deutsche Bank upgraded European lenders ato overweight earlier in the day. Shares in French lenders BNP Paribas and Societe Generale climbed 0.34% and 1.13%, while Germany's Deutsche Bank and Commerzbank advanced 0.45% and 2.28%. 

On the downside, Cap Gemini, the world’s second-largest technology consulting company, tumbled 1.65% after rival Infosys Ltd. cut its sales-growth forecast and said higher wages and currency fluctuations will hurt profitability. 

Elsewhere, ASML, Europe’s largest chip-equipment maker, lost 1.64% after Advanced Micro Devices, the second-largest maker of processors for personal computers, cut its third-quarter revenue forecast, citing weak demand across all product lines in a challenging economic environment. 

In London, FTSE 100 slipped 0.62%. 

Financial stocks were mixed, as shares in Lloyds Banking jumped 1.89% and Barclays surged 2.55%, while the Royal Bank of Scotland and HSBC Holdings dropped 0.31% and 0.38% respectively. 

Mining companies were also mixed, as shares in Rio Tinto slumped 0.49%, while BHP Billiton edged up 0.06%. 

In the U.S., equity markets followed lower in midsession trade with the Dow Jones down 0.04%. the broad based S&P 500 off by 0.41% and the tech heavy Nasdaq lower by 0.12%.



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