|
Europe closes lower
|
 |
September 18, 2001: 1:03 p.m. ET
Bank of England rate cut, U.S. stabilization fail to influence sentiment
|
NEW YORK (CNNfn) - Europe's major bourses closed lower Tuesday, lacking inspiration from a modest rate cut by the Bank of England and some stabilization in the U.S. markets.
London's FTSE 100 lost 50 points to close 1 percent lower at 4,848.70, having earlier fallen over 2.2 percent to 4,772.2 as banks and drugs pulled blue chips into the red. France's CAC 40 closed 1.13 percent lower at 3,970.18 after recovering from an earlier session low of 3,891.32.
In late trading, Frankfurt's electronically traded Xetra Dax lost 1.06 percent to 4,189.85.
U.S. stocks early Tuesday took a modest step back up as investors, in the second day of assessing the economic fallout from last week's terrorist attack, sought value in technology issues.
Britain's leading shares fell Tuesday but bounced off session lows after Wall Street put the brakes on a slide and turned higher.
"Markets in Europe moved down after a turnaround in the U.S. markets. The good news was that the Bank of England cut interest rates at the same time other European bourses and the Bank of Japan joined in," said Khuram Chaudhry, equity strategist with Merrill Lynch in London.
But the quarter-percentage-point interest rate cut by the Bank of England failed to breathe life into the UK market, which viewed the move as too little too late.
On Monday, the European Central Bank surprised markets with a half-point interest rate cut, a few hours after an equal cut by the U.S. Federal Reserve earlier.
Banks and drugs were the main FTSE losers, taking 23 and 18 points respectively off the index with HSBC (HSBA), Lloyds (LLOY) and Royal Bank of Scotland (RBOS) slipping.
"The markets are still very defensive in tone. Airlines are still being hit quite sharply. But we saw some renewed interest in some of the telecommunication names," Chaudhry said.
Telecom stocks staged a late rally with Vodafone (VOD) and British Communications (BT) closing over 4 percent higher.
French shares were mired in red, but off session lows. Aerospace firm EADS continued its freefall, shedding another 10 percent amid worries its Airbus civil aviation unit could face fewer orders for new aircraft and potential cancellations as passengers grow fearful of flying after last week's air attacks.
In the technology sector, comments by Computer Associates International (CA: down $0.04 to $25.41, Research, Estimates) that it expected last week's tragedy and its economic fallout to delay the sector's recovery, pushed chipmaker STMicroelectronics and software firm Dassault Systemes down 5 percent each.
Banking shares like BNP Paribas and Societe Generale both also sagged more than 3 percent amid concerns that lower European rates will cut their interest margins.
Germany's main airline, Lufthansa (FLHA), took a hit while shares in KLM Royal Dutch Airlines dived 9.6 percent in Amsterdam in afternoon trading after it said it expects an operating loss for 2001as a result of the U.S. attacks.
Air France (PAF) also shed value Tuesday in Paris. 
--from staff and wire reports
|
|
|
|
|
 |
|
