May 16, 2006	Tuesday	Rabi-us-Sani 17, 1427

LONDON, May 15: World stock markets fell strongly on Monday, hit by investor concerns over a struggling dollar and possible higher inflation in the United States, analysts said. After heavy losses on Wall Street Friday and in Asia on Monday, London’s FTSE 100 index of leading shares shed as much as 2.65 per cent in morning trade to 5,755.40 points — the lowest intra-day level since February 9.

Friday saw the FTSE’s biggest daily sell-off for two years, as like Europe’s other main indices, it closed down more than 2.0 per cent.

On Monday, the FTSE 100 sank... extending the heavy losses from late last week as inflation fears and a weaker dollar unnerved global equity markets, analysts at the Sucden brokerage firm said.

US stocks tumbled Friday in the second straight big sell-off on Wall Street, with the market concerned that rising commodity prices will translate into higher inflation and prompt the Federal Reserve to raise interest rates again in June.

The dollar has been weakened in recent weeks, however, by expectations that the Fed could decide soon to end its tightening cycle dating back June 2004.

On Monday in Asian trading the dollar hit a fresh one-year low against the euro, before recovering slightly. The European single currency hit 1.2973 dollars, the highest level since May 5, 2005.

Markets are concerned about inflation and the threat of higher interest rates, a falling dollar, and falling growth in the US towards the end of the year, Cantor Index analyst David Buik said.

A weak dollar hits many FTSE companies, including pharmaceuticals and oil firms, whose revenues are to a large extent earned in dollars.

In afternoon stock market trading, the FTSE 100 was down 1.09 per cent at 5,847.90 points, Frankfurt’s DAX 30 fell 1.29 per cent to 5,839.87 points and in Paris the CAC 40 index dropped 1.14 per cent to 5,091.57.

In London, mining shares crumbled on profit-taking. Kazakhmys tumbled 7.30 per cent to 1,219 pence, Antofagasta gave up 5.08 per cent to 2,318 pence and Xstrata lost 6.76 per cent to 2,247 pence.

Mining shares have made big gains in recent weeks owing to record prices for metals. Last week, platinum, aluminium, zinc, nickel and copper prices struck historic peaks, while silver and gold hit the highest level since 1980.—AFP