March 8, 2006	Wednesday	Safar 7, 1427

LONDON, March 7: European stock markets sank Tuesday following heavy losses on Wall Street and in Tokyo, while overnight falls in raw material prices dragged mining groups lower in London trading.

London’s FTSE 100 index of leading shares dropped 0.96 per cent to 5,841.30 points in early afternoon deals, Frankfurt’s DAX 30 lost 0.76 per cent to 5,710.05, and in Paris the CAC 40 fell 0.62 per cent to 4,979.88 points.

The DJ Euro Stoxx 50 index of leading eurozone shares shed 0.74 per cent to 3,726.30 points.

The euro stood at 1.1904 dollars.

Wall Street had tumbled on Monday when a bond market rout sent yields to multi-year highs, unsettling investors and eclipsing the positive impact of a blockbuster 67-billion-dollar telecoms merger between AT and T and BellSouth.

US stocks were whipsawed by a sharp drop in the bond market, with yields on 10-year Treasury notes reaching their highest levels since June 2004, just before the US Federal Reserve began its current interest rate-tightening cycle.

Japanese share prices fell Tuesday as investors opted to take profits ahead of a decision by the central bank this week on whether to end its ultra-loose monetary policy, dealers said.

In European trading on Tuesday, miners forged lower after sharp falls in metal prices, including gold, copper and aluminium.

The world’s largest resources company BHP Billiton saw its shares dip 3.53 per cent to 930 pence. Anglo-Australian mining giant Rio Tinto lost 2.75 per cent to 2,615 pence while global mining group Anglo American shed 3.19 per cent to 2,062 pence.

On Wall Street on Monday, the Dow Jones Industrial Average sank 0.57 per cent to 10,958.59 while the Nasdaq composite shed 0.72 per cent to 2,286.03 points.

The broad-market Standard and Poor’s 500 index dropped 0.70 per cent to 1,278.26 points.

Treasury prices in recent US sessions have been hurt by concerns about rising rates across the globe, and the weaker bond prices in turn have hurt the stock market.

The yield on the 10-year benchmark US Treasury bond had jumped on Monday to 4.738 per cent from 4.684 per cent Friday, and the 30-year bond rose to 4.723 per cent from 4.589 per cent. The higher yield reflects a drop in bond prices.

In Asia on Tuesday, Tokyo’s benchmark Nikkei-225 index fell 1.10 per cent to 15,726.02 points, with sentiment also dampened by overnight losses on US markets.

Hong Kong’s key Hang Seng Index closed down 1.32 per cent at 15,602.36 points as property stocks were hit by renewed worries over the outlook for interest rates, dealers said.—AFP