November 16, 2007	Friday	Ziqa’ad 05, 1428

LONDON, Nov 15: European stocks dropped on Thursday after losses returned to Asian bourses and Wall Street overnight as markets again focused on worries over the global credit squeeze, dealer said.

British bank Barclays became the latest high profile financial institution to announce hefty losses linked to the US subprime mortgage crisis and consequent global credit crunch.

Barclays said its investment arm, Barclays Capital, took a 1.3-billion-pound (1.8-billion-euro, 2.7-billion-dollar) hit between the start of July and end of October.

Barclays share price rose as analysts had feared greater losses but banking rivals saw their market values slashed.

In late morning trade, London’s FTSE 100 index of leading companies fell 0.92 per cent to 6,372.90 points, Frankfurt’s DAX 30 also lost 0.92 per cent to 7,711.71 points and in Paris the CAC 40 shed 1.46 per cent to reach 5,531.77.

The European single currency stood at $1.4621.

Initially it was positive in the UK, helped by the Barclays news, but after the initial euphoria had worn off, the market took its lead from the US and Asia overnight, said Richard Hunter, head of UK equities at Hargreaves Lansdown in London.

Financial markets meanwhile remain nervous that more banks will report losses from the US subprime loan crisis caused by rising defaults by American homebuyers with patchy credit histories.

Investors’ fears about this issue are far from over. Meanwhile, higher oil prices and a stronger local currency give investors another reason to worry.

Wall Street had lost ground Wednesday as a late selloff gathered steam when the market failed to maintain momentum from a powerful rally a day earlier.

A jump in oil prices and a fizzled rally in the tech sector prompted a sharp move lower following lackluster trade for most of the session.

The Dow Jones Industrial Average slumped 0.57 per cent to close at 13,231.01 in a choppy session that saw swings in both directions.—AFP