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European shares fall for 3rd day on growth worries

European shares fall for 3rd day on growth worries
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First Published: Thu, Jun 24 2010. 03 10 PM IST
Updated: Thu, Jun 24 2010. 03 10 PM IST
London: European shares fell on Thursday, extending their decline to a third day, with banks and miners slipping, on investor concerns about the growth outlook after the U.S. Federal Reserve’s downbeat economic assessment.
At 2:28pm, the FTSEurofirst 300 index of top European shares was down 1.1% at 1,028.27 points, after falling 1% in the previous session.
The index is down more than 7% from a mid-April peak, on worries about debt levels in Europe.
Miners were lower, reversing gains from the opening minutes of trading. They had risen on hopes that Australia’s new Prime Minister, Julia Gillard, will compromise on proposals for a tax on resource companies.
But traders said the hopes of the proposals being diluted had already been priced in, and were more than offset by the subdued outlook for growth.
Anglo American, BHP Billiton, Fresnillo, Kazakhmys, Lonmin, Rio Tinto, and Xstrata fell between 1.5 and 3 percent.
The US Federal Reserve renewed its vow to hold benchmark interest rates exceptionally low on Wednesday, but downgraded its assessment of the economic recovery.
“The Fed referred to the problems in Europe, and how they would affect the outlook for growth. If the market had been worried about interest rate hikes, you would have called it a dovish statement. But the market is more worried about growth,” said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin.
Oils to fall, as crude prices dropped, included Total and Royal Dutch Shell, down 0.8 and 1.5 percent respectively.
The heavyweight banking sector also fell, with some banks hurt by Goldman Sachs cutting price targets.
BNP Paribas, Banco Santander, BBVA, Credit Agricole, Societe Generale and UniCredit fell between 0.8 and 3.6%.
Across Europe, Britain’s FTSE 100, Germany’s DAX and France’s CAC40fell between 0.8 and 1.1%.
The Thomson Reuters Peripheral Eurozone Countries Index fell 1.5%.
Swedish fashion giant Hennes & Mauritz fell 1.8% after meeting forecasts for second-quarter profit, but flagged deeper discounts in the next quarter after a two-month sales dip brought on by cold weather.
European policymakers dug in to defend budget austerity plans on Thursday ahead of a G20 summit set to pit calls for fiscal restraint against warnings that heavy cost-cutting threatens recovery.
Investors will look at US durable goods and weekly jobless data, due at 6:00pm after recent housing data, as well as the Fed’s comments, cast doubt on the strength of the recovery in the world’s biggest economy.
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First Published: Thu, Jun 24 2010. 03 10 PM IST
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