European stocks weaken

Published October 10, 2006

LONDON, Oct 9: European equity markets mainly fell on Monday when investor sentiment was shaken by North Korea's nuclear test, but London stocks were lifted by the pharmaceutical sector, dealers said.

With North Korea's neighbouring Tokyo market shut for a holiday, the reaction from equity markets to news that Pyongyang had carried out its first test of an atomic bomb was somewhat muted although prices in Hong Kong fell sharply.

Meanwhile the US stock market was to open on Monday, but US bond markets and Federal offices are closed for the Columbus Day holiday, which could also limit the impact of North Korea's actions, dealers said.

On Monday in Paris the CAC 40 index of leading shares lost 0.28 percent to 5,267.26 points, while in Frankfurt the DAX 30 index fell 0.48 percent to 6,056.71. London's FTSE 100 index rose 0.31 per cent to 6,019.60 points.

The DJ Euro Stoxx 50 index of leading eurozone shares decreased 0.38 per cent to 3,925.17 points. The euro stood at 1.2606 dollars.

Hong Kong share prices closed sharply lower on Monday, as the news from North Korea sparked concerns over regional security and the prospect of heightened political tensions, dealers said.

The benchmark Hang Seng Index finished 1.27 per cent lower at 17,675.24 points.

World markets will have their eyes on the Japanese stock market on Tuesday to see which direction Asia's largest bourse takes in reaction to the nuclear news.

In Europe on Monday, Paris-based aerospace giant EADS saw its share price plunge 2.01 per cent to 20.02 euros.

The European aerospace group was ready to replace Christian Streiff as chief executive of its aircraft subsidiary Airbus with EADS co-chairman Louis Gallois, a source close to the matter told AFP on Monday.

The European Aeronautic Defence and Space company (EADS) was expected to accept Streiff's mooted resignation, the source said. EADS owns 80 per cent of Airbus and is due to acquire the remaining 20 per cent from British group BAE Systems. —AFP

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