LONDON, Nov 5: Europe’s main stock markets fell on Monday, with financials in the firing line, as subprime-weary investors were spooked by the resignation of Citigroup boss Charles Prince, analysts said.
Citigroup also said overnight that the biggest US bank expected losses of up to 11 billion dollars (7.6 billion euros) related to problems in the US subprime mortgage sector.
Investors are worried about the true extent of the global financial sector’s exposure to the troubled US housing market, which is now feeling the heat of home loans made to high-risk American borrowers. Later Monday, all eyes will be on Wall Street’s reopening at 1430 GMT.
London shares were also dragged lower as Qatari investment fund Delta Two ditched a takeover of British supermarket group J Sainsbury worth 10.6 billion pounds, citing the poor state of global credit markets amid the subprime saga.
Near the half-way mark on Monday, the British capital’s FTSE 100 index of leading shares slumped 1.38 per cent to 6,440.70 points.
Frankfurt’s DAX 30 lost 0.71 per cent to 7,793.43 in early afternoon deals and in Paris the CAC 40 fell 0.94 per cent to 5,666.61 points. The DJ Euro Stoxx 50 index of top eurozone shares shed 0.71 per cent to 4,378.71.
The banking sector fell sharply in Europe on Monday. Many commercial banks have investments tied up in securities backed by subprime mortgages.
In Frankfurt on Monday, Commerzbank shares dived 2.87 per cent to 26.72 euros and Deutsche Bank lost 3.16 per cent to 84.25 euros.
In Paris, BNP Paribas and Credit Agricole dropped 3.30 per cent and 2.59 per cent to stand at 69.16 euros and 25.19 euros respectively.
In London deals, Barclays saw its share price tumble 5.77 per cent to 506.5 pence and Royal Bank of Scotland sank 3.84 per cent to 457.25 pence.
Shares in J Sainsbury, Britain’s third-biggest supermarket chain, meanwhile slumped by 19 per cent to 449.5 pence after the Qatari takeover bid evaporated owing partly to the ongoing global credit squeeze.—AFP
