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European stocks lower on disappointing GDP data; DAX down 0.47%

Published 01/11/2012, 07:47 AM
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Investing.com - European stock markets extended losses on Wednesday, as market sentiment deteriorated after a report showed that the euro zone’s economy grew less than initially expected in third quarter of 2011.

During European afternoon trade, the EURO STOXX 50 dropped 0.64%, France’s CAC 40 declined 0.45%, while Germany’s DAX 30 retreated 0.47%.

Eurostat said that the euro zone’s gross domestic product rose by a seasonally adjusted 0.1% in the third quarter, down from a preliminary estimate of 0.2% and slowing from growth of 0.8% in the preceding quarter.

Sentiment also came under pressure after Fitch ratings agency said that the European Central Bank should ramp up the buying of troubled euro zone debt to support Italy and prevent a "cataclysmic" collapse of the euro.

The comments came as Spain and Italy were preparing to sell as much as EUR17 billion in debt on Thursday and Friday respectively.

Italy’s Unicredit continued to lead gains in the financial sector, with shares surging 4.37%, while Dutch lender ING Group and French lender BNP Paribas climbed 3.34% and 1.39% respectively.

Elsewhere, Repsol, Spain’s largest oil company slumped 6.16% after selling 61 million of its own shares.

Pirelli & C. SpA, Europe’s third-largest tiremaker, also added to losses with shares sinking 4.90% after Goodyear Tire & Rubber Co. said global tire demand is weak. Michelin and Continental AG, Europe’s second-biggest maker of car parts, were also down 1.05% and 0.75% respectively, after the news.

In London, FTSE 100 declined 0.63%, after data showed that the U.K. goods trade deficit expanded more-than-expected in November.

Financial stocks were mixed as shares in the Royal Bank of Scotland jumped 2.37% and Lloyds Banking jumped 2.23%, while Barclays and HSBC Holdings retreated 0.68% and 0.73%.

Mining giants Bhp Billiton and Rio Tinto pared earlier gains, with shares advancing 0.02% and 0.53%, while copper producers Xstrata and Kazakhmys slipped 0.17% and 0.10% respectively.

In the U.S., equity markets pointed to a mixed to lower open. The Dow Jones Industrial Average futures pointed to a fall of 0.21%, S&P 500 futures signaled a 0.28% decline, while the Nasdaq 100 futures indicated a 0.26% loss.

Later in the day, German Chancellor Angela Merkel was to meet with Italian Prime Minister Mario Monti, to discuss plans to shore up Italy’s finances.


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