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European stocks tumble on contagion fears; DAX down 0.61%

Published 01/10/2011, 05:07 AM
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Investing.com – European stock markets were broadly lower on Monday, as market sentiment was weighed by lingering sovereign debt contagions fears, while U.S. futures indexes pointed to a lower open on Wall Street.

During European morning trade, the EURO STOXX 50 tumbled 1.20%, France’s CAC 40 slumped 1.31%, while Germany's DAX was down 0.61%.

Shares in the financial sector performed poorly after media outlets reported over the weekend that Germany and France were pressuring Portugal to accept a bailout of as much as EUR100 billion. The reports were subsequently denied by Portugal.

Shares in Europe’s largest lender BNP Paribas plunged 2.79%, Spain’s biggest bank Banco Santander saw shares tumble 2.24%, while shares in Portugal’s biggest publicly traded bank Banco Comercial Portugues plummeted 4.42%.       

Elsewhere, shares in Europe’s largest telephone company Deutsche Telekom dropped 1.44% after the stock was downgraded by Credit Suisse. 

Also Monday, shares in the world’s largest maker of food ingredients Danisco rallied 25.28% after it agreed to be acquired by the world’s second biggest chemical company DuPont for approximately USD5.8 billion.   

In London, the commodity-heavy FTSE 100 shed 0.37% as commodity prices were pressured lower.

Shares in the world’s largest mining group BHP Billiton tumbled 1.20%, rival Rio Tinto saw shares slump 1.53%, while shares in copper producer Xstrata fell 1.25%.

Meanwhile, shares in oil giant British Petroleum dropped 1.84% after a pipeline leak forced the company to shut down 95% of production at the Trans-Alaska Pipeline System, its biggest oil field in North America. 

The outlook for U.S. equity markets, meanwhile, was downbeat. The Dow Jones Industrial Average futures pointed to a drop of 0.33%, S&P 500 futures indicated a decline of 0.47% and Nasdaq 100 futures pointed to a loss of 0.42%.

Later in the day, the largest U.S. aluminum producer Alcoa was to be the first Dow Jones Industrial Average component to report earnings for the fourth quarter.


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