Thursday November 6, 8:44 am ET By Pan Pylas, AP Business Writer
LONDON (AP) -- European stock markets traded down Thursday after heavy sell-offs on Wall Street and Asia despite interest rate cuts across the continent, including a much bigger than anticipated reduction from the Bank of England.
The FTSE 100 index of leading British shares was down 167.72 points, or 3.7 percent, at 4,363.01, while Germany's DAX was 211.66, or 4.1 percent, lower at 4,955.21. France's CAC-40 was down 127.33 points, or 3.5 percent, at 3,490.78.
Except for some volatility after the interest rate cuts from the Bank of England and the European Central Bank and an unscheduled reduction by the Swiss Central Bank, Europe's stock indexes were still more or less at the level they were before the decisions.
While the Bank of England slashed its benchmark rate by 1.5 percentage points to 3.00 percent, its biggest cut since March 1981, the European Central Bank and the Swiss National Bank opted for more modest half-point reductions. The Czech Republic's central bank cut by three-quarters of a point.
The Bank of England's bigger than anticipated rate cut stoked expectations that the European Central Bank would be more aggressive than expected. Its decision to cut by only a half-percent disappointed investors looking for more aggressive action.
"The ECB rate cut came as a disappointment in the end after far more aggressive action from the Bank of England," said Jennifer McKeown, European economist at Capital Economics.
The failure of the FTSE to rally strongly in the wake of the Bank of England's aggressive interest rate cut indicated that the bank may have further reinforced fears about the length and depth of the recession in Britain.
"Traders are thinking, if we've really got to cut rates to 3 percent, then how bad is it out there," said Mic Mills, senior trader at ETX Capital.
"Recessionary fears were bad before; they just got a whole lot worse," he added.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment