European markets plummet
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September 14, 2001: 12:21 p.m. ET
Insurance, airlines go into the red; oil jumps on supply fears
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LONDON (CNN) - Europe's major markets plunged to fresh lows on Friday, amid concerns for the world economy following Tuesday's attacks on the U.S.
London's FTSE 100 slumped 3.6 percent , or 176.6 points, to close at 4,767.0 and the CAC 40 blue chip index dived 4.8 percent, or 198.47 points, to reach 3,915.4, while the Frankfurt's Xetra Dax plunged 5.5 percent, or 239.96 points to 4,152.44.
"You are seeing people marking shares down ahead of the weekend and Wall Street reopening on Monday," fund manager John Hatherly of M&G told Reuters.
U.S. equity markets are now expected to start trading on Monday after terrorist attacks on the World Trade Center buildings, which housed many financial corporations, forced the longest trading halt since World War I.
Airlines were the hardest hit in the fallout across Europe, as transatlantic flights remained disrupted.
British Airways (BAY), Europe's biggest airline, closed more than 17 percent lower to top the losers on the FTSE 100.
Its stock dropped more than 5 percent on Thursday after the global airlines body, IATA, also warned that the industry was heading for record losses in 2001.
Germany national carrier Lufthansa (FLHA) was the worst performer in Frankfurt, falling 10.9 percent while Italian flag carrier Alitalia dropped more than 9 percent in Milan.
Air France (PAF) lost 10.4 percent in Paris.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, had dived more than 5 percent to lows not seen since November 1998 by the time most European markets had closed, with no sectors showing any gains.
Oil stocks had earlier jumped amid concerns that U.S. retaliation for this week's terrorist attacks could hurt supplies from the Middle East.
But at the end of trading in London, Shell Transport (SHEL) was down by 1.5 percent while BP (BP-A) closed 2.6 percent lower.
Royal Dutch, which owns the Royal Dutch/Shell Group along with its London partner, lost 4.4 percent in Amsterdam. TotalFinaElf (PFP) closed 4.3 percent lower in Paris.
Brent Crude futures for November delivery soared $1.03 to $29.40 in late trade on London's International Petroleum Exchange.
Insurance companies, which had been rattled by the attacks in the U.S. that could cost them as much as $20 billion, also reversed earlier gains made after they declared their liabilities to the U.S. disaster.
Munich Re (FMUV3), the world's biggest reinsurer, fell 4.6 percent and insurer Allianz (FALZ) lost more than 7 percent in Frankfurt, while Europe's biggest insurer AXA (PCS) ended 5.8 percent lower in Paris.
Leisure and luxury goods companies also fell amid fears demand for their products and services will shrivel if consumers panic in the aftermath of the U.S. attacks.
LVMH (PMC), the world's top luxury goods company, ended 8.2 percent lower in Paris while hotel operator Accor (PAC) was off 7.8 percent.
In Amsterdam, the AEX index lost 6.8 percent and the SMI in Zurich was more than 5 percent lower. Milan's MIB30 index was down 6.6 percent.
With the U.S. markets seeking to reopen on Monday, traders were mixed as to whether there will be a "patriotic" rally, or fresh falls as investors pull their cash out of insurers, airlines and other sectors likely to be damaged by Tuesday's disaster in the U.S.
One European equity strategist told Reuters: "I think there's going to be a strong patriotic rally – it might last for around 48 hours, but then the background of the weak economy will show through."
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