LONDON, Nov 6: Europe’s main stock markets rallied slightly on Tuesday but banking shares experienced further losses on concerns over a global credit squeeze, traders said.
Investors also kept a close watch over record levels for the euro and oil.
Near the half-way mark on Tuesday, London’s FTSE 100 index of leading companies added 0.27 per cent to 6,478.90 points.
Frankfurt’s DAX 30 rose 0.45 per cent to 7,842.60 points in early afternoon deals and in Paris the CAC 40 gained 0.23 per cent to 5,697.62.
The DJ Euro Stoxx 50 index of top eurozone shares advanced by 0.26 per cent to 4,404.24 points.
The European single currency stood at $1.4551 after hitting a record high 1.4556.
Europe’s main stock markets had fallen Monday, with financials in the firing line, as subprime-weary investors were spooked by the resignation of Citigroup boss Charles Prince.
Citigroup, the biggest US bank, had Sunday said that it expected losses of up to $11 billion (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.
Banking shares continued to fall on Tuesday. In Paris, Societe Generale shed 1.90 per cent to 104.32 euros, while Royal Bank of Scotland fell 0.75 per cent to 460.75 pence in London. In Frankfurt, Commerzbank lost 0.22 per cent to 27.13 euros.
Losses for financials were offset, however, by strong gains for mining and energy groups, whose share prices benefited from surging commodity prices.
Tullow oil jumped 3.47 per cent to 670 pence and miner BHP Billiton won 2.35 per cent to 1,740 pence in London.
The price of Brent crude oil struck an historic peak of $92.36 per barrel in London trading Tuesday on concerns over tight global energy supplies.
That beat a previous high of $92.31, struck on Monday.
New York light sweet crude had hit an all-time peak of 96.24 dollars per barrel last Thursday.
Elsewhere, the price of gold rose to 820 dollars an ounce, its highest level since 1980, as the precious metal was lifted by the weak dollar and fears of inflation spurred by record high crude oil prices.
Gold is seen as a good store of value amid inflation.
In other market news, the dollar plunged Tuesday to a new all-time low against the euro on fears for the future of the US financial sector.
A strong euro hurts exporters whose goods are priced in the single currency.—AFP
