Europeans Stock Markets get hit from all sides
Chancellor Angela Merkel is still under pressure from France, Spain and Italy to soften Germany’s resistance to the creation of bailout funds which will be allowed to pump directly money into countries, struggling with high borrowing costs. Instead considering a joint debt deal, Merkel is keen to focus on measures to get economic growth going. Another important issue concerning Germany is that the number of people out of work rose by 7,000 K to 2.88 million, much more than economists forecasted (5000K). Also the euro has had a rough ride of late having lost 3.4 percent in the past three months and fell 0.37% against the Sterling on Thursday. It has been a similarly bad time for the stock markets, which continue to tumble as EU leaders hold summit.
The Gross Domestic Product (GDP) figure, published on Thursday by official statistics, confirms finally that Britain is in a recession. The output declined by 0.3% with regard to the last quarter and decreased by 0.2% compared to the last year. Whereas the economic sentiment indicator in the UK improved, the sentiment worsened in Germany, France and decreased in the whole euro-zone by 0.6 points to 89.9.
During the day news was dominated by Bob Diamond, who is under intense pressure now to quit his position as Barclays’ (BARC.L) chairman. For manipulating the LIBOR (an interbank lending rate, but on which many other loans are based) Barclays’ chief executive had to answer “serious questions”, said Chancellor George Osborne. According to BBC News, Barclays has to face a fine now of probably £290 million. Share prices dropped drastically after the LIBOR scandal, Britain’s FTSE 100 was dragged down by the banks, 1.2% lower to 5456 at one point, with RBS (down 10.9% to 207p) joining Barclays (down 12.2% to 172p) at the bottom.
Another British company which is in the grip of bad news is Ladbrokes (LAD.L), Britain’s second-biggest bookmaker. Investors got angry after the company warns in an update on Thursday that the digital profits will be roughly half the level of a year ago which is caused by a decline in revenues from its online business. Shares in Ladbrokes fell almost 12 % after the warning.
After a bad day, the FTSE100 finished at 5493.06 points losing 0.56% also struggling were France’s CAC 40 which finished at 3051.68 points (-0.37%) and the German DAX closing down at 6149.91 (-1.27%).
This was posted in Bdaily's Members' News section by James .