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European stocks lower, London hit by poor data

European stocks lower, London hit by poor data
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First Published: Thu, Jun 18 2009. 04 45 PM IST
Updated: Thu, Jun 18 2009. 04 45 PM IST
London: European stock markets were lower Thursday, extending losses with sentiment in London hit especially by more dire British economic data showing the rising cost of the recession.
In late morning trade, London’s FTSE 100 index of leading shares was down 0.25% to 4,267.82 points.
In Frankfurt the DAX 30 slipped 0.02% to 4,799.12 points near the half-way stage and the Paris CAC 40 lost 0.17% to 3,155.86.
The DJ Euro Stoxx 50 index of leading eurozone shares edged down 0.03% to 2,382.95 points.
On the foreign exchange market, the European single currency rose to $1.3947.
Dealers in London digested official data Thursday that showed Britain’s public deficit had widened to a record £19.9 billion (€23.2 billion, $32.3 billion) in May as the recession crushed tax revenues.
Separate figures showed British retail sales unexpectedly fell in May from April, as shoppers tightened their belts to beat the recession.
“The markets are looking very tired right now,” said Tim Hughes, head of sales trading at financial spread-betting firm IG Index in London.
“With today’s news of poor retail sales figures in the UK serving as a reminder that (households) are still struggling to make ends meet, it’s difficult to see where the economic energy is going to come from to pull us out of this.”
He said that the markets were also waiting to see how US and European regulatory reform, driven by the desire to avoid any repeat of the global crisis, worked out.
“With the spectre of regulation hovering, it’s not hard to see why the (FTSE) bulls are resting at 4,500 (points), the bears at 4,300, both biting their nails.”
World political leaders and bank chiefs, led by US President Barack Obama, have called for a radical overhaul of banking regulation after a lack of controls led to the worst downturn in decades.
Obama on Wednesday proposed the most “sweeping” regulatory overhaul since the 1930s, aiming to stop future meltdowns and to purge the finance system of lax oversight, greed and huge debts.
In London, the governor of the Bank of England late Wednesday suggested banks should be made to draw up wills or contingency plans similar to contracts drawn up by individuals in case of death.
US stocks ended mixed in choppy trading Wednesday as Obama unveiled has regulation reform plans and the credit rating and outlook of 22 banks were lowered.
Earlier Thursday in Asia, Tokyo closed down 1.39% as exporters were hit by a stronger yen, dealer said.
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First Published: Thu, Jun 18 2009. 04 45 PM IST
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