Eurostoxx 50: 2,254.92 (+5.53) Frankfurt DAX: 5,867.81 (+38.27) Paris CAC: 3,064.84 (–10.32):EUROPEAN STOCKS dropped yesterday, erasing earlier gains, as a surge in French borrowing costs added to concern the region's debt crisis is spreading.
The benchmark Stoxx Europe 600 Index lost 0.4 per cent in London. The gauge earlier rose as much as 0.8 per cent after Italy met its fund-raising target in a Treasury bills auction and the European Central Bank was said to be buying the nation’s bonds, driving down yields.
“This volatility is deterring investment,” said Neil Dwane, chief investment officer at Allianz Global Investors. “It’s deterring people from making rational investment choices. Unfortunately with what is going on in Europe, we are no clearer to a resolution, so it’s going to last a little longer.”
Stocks tumbled after Italian borrowing costs surged to euro-era records.
French 10-year bonds extended their declines, sending the yield 20 basis points higher to 3.40 per cent. Sean Egan, president and founding principal of Egan-Jones Ratings, told Bloomberg the nation’s sovereign-debt rating is “probably headed south”.
Credit Agricole fell 2.3 per cent to €4.90. The bank reported a 65 per cent fall in third-quarter profit to €258 million as writedowns on Greek debt crimped earnings.
Vedanta Resources slid 9.5 per cent to 1,131p after the largest copper producer in India reported a 92 per cent drop in first-half profit to $27.8 million on foreign-exchange losses.
Air France-KLM lost 5 per cent to €4.62 after the airline reported a 31 per cent drop in quarterly profit and said it expects to post a full-year loss.
K+S slid 4.7 per cent to €42.40 as Europe’s largest producer of potash pared its outlook for sales and profit this year and the next as economic volatility prompts wholesalers to scale back orders.
European Aeronautic Defence Space rose 5 per cent to €20.97 after third-quarter profit surged to €312 million from €13 million and the German government agreed to buy a 7.5 per cent stake in the company from Daimler.
Natixis climbed 3.8 per cent to €2.12 after reporting a 13 per cent increase in third-quarter profit.
Société Générale raised its recommendation on the shares to “buy” from “sell”. – (Bloomberg)
