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European stocks slide after strong rally

European stocks slide after strong rally
AFP
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First Published: Mon, Sep 21 2009. 03 57 PM IST
Updated: Mon, Sep 21 2009. 03 57 PM IST
London: Europe’s main stock markets fell on Monday as traders cashed in gains from last week’s strong rally as a lengthy public holiday in Japan made for a subdued session, dealers said.
The FTSE 100 index sank 0.79% to 5,132.05 points in late morning London trade.
Frankfurt’s DAX 30 dived 1.25% to 5,632.60 points and in Paris the CAC 40 slid 0.69% to 3,801.31 points.
The DJ Euro Stoxx 50 index of top Eurozone shares lost 1.13% to 2,854.90.
On the foreign exchange market, the European single currency stood at 1.4652 dollars.
Hong Kong shares fell 0.70% on Monday as dealers made the most of recent bumper gains, dealers said.
“With most global indices now looking overbought in the short-term, most observers seem to be expecting consolidation at the start of this new week,” said an economist Ian Williams at Altium Securities.
“However, those looking for buying opportunities this month have generally had to move quickly.”
European equities finished narrowly mixed on Friday in the absence of fresh economic data, with investors consolidating substantial gains made over the week.
Wall Street regained its upward momentum on Friday as the market extended its feel-good rally amid brighter economic prospects.
The Dow Jones Industrial Average rose 0.37% to hit a fresh 11-month high of 9,820.20 points, a day after investors locked in profits and took a breather after a long market rally.
“Equity markets in Europe ... start the new week little changed despite a solid Friday afternoon session on Wall Street,” said IG Index analyst Ben Potter in London on Monday.
“Further news of Lloyds Banking Group or RBS’ scramble for capital to reduce the impact of the move into the Asset Protection Scheme will also be watched,” he added.
Britain’s Royal Bank of Scotland is considering approaching the market for extra money to avoid giving more control to the government, reports said over the weekend. The bank declined to comment.
RBS, which is 70% owned by taxpayers after being bailed out in the global financial crisis, is preparing to join the government’s insurance scheme for toxic assets, the reports said, citing unnamed sources.
But it is also considering a £3 to 4 billion (€3.3-4.4 billion, $4.8-6.4 billion) share issue to reduce the stake it would hand the government for joining the government insurance scheme for toxic assets.
RBS shares sank 4.97% to 53.50 pence in late morning London deals, while Lloyds Banking Group shed 2.26% to 108.15 pence.
Part-nationalized Lloyds said last week that it was considering alternative options to the Asset Protection Scheme, citing improving economic conditions.
The Japanese stock market was closed on Monday through to Wednesday for a series of public holidays.
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First Published: Mon, Sep 21 2009. 03 57 PM IST
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