Wide declines in top equities markets

Elaine Frei | | 0 Comments

In Europe on Monday the FTSE Eurofirst 300 dropped 0.6 percent to 1533.15 on declines in the banking and oil sectors. Greek banks saw declines on fears that rises in the use of credit in November means that higher Eurozone interest rates will lead to more loan defaults. The oil sector was hurt by a decline in crude oil prices, while European stock exchange operators declined on the news that the London Stock Exchange has rejected an offer from Nasdaq.

London markets were lower on profit-taking. Miners and the energy sector declined while hotels were helped by the prospect of consolidation within the sector. Travel agents were mixed after an announcement that MyTravel will merge with Thomas Cook. The FTSE 100 was 0.5 percent lower to 6,353.5, while the FTSE 250 dropped 0.6 percent to 11,454.8 on a slow day in which only 2.7 billion shares were traded.

Declines in the oil sector and among mortgage lenders and homebuilders sent Wall Street lower by midday. The Dow Jones Industrial Average was about even at 12,575.78, but the Nasdaq Composite dropped 0.3 percent to 2,451.61 and the S&P 500 fell 0.2 percent to 1,435.80. The pharmaceuticals sector was mixed as Bristol-Myers Squibb declined on failing merger talks but Onyx Pharmaceuticals was up a phenomenal 82.9 percent on good news from trials on a new liver cancer treatment.

The Tokyo markets were closed for the day.

In the commodities markets, crude oil prices fell significantly after Saudi Arabia’s energy minister said that it was possible that there would be no new production cuts implemented when OPEC meets in March. Several of OPEC’s member nations have said that they can’t see a need for any further cuts. In metals markets, the price of gold hit a six-month high before settling back, palladium prices remained high, and tin hit a 22-year high after several developments that threatened supply.

In currency markets, the yen hit an all-time low versus the euro in the aftermath of the G7 meeting over the weekend. The Japanese currency was also lower in relation to the US dollar. The dollar also gained versus the euro and sterling ahead of remarks to Congress from Federal Reserve chairman Ben Bernanke, due later in the week. The Australian dollar and the South African rand also declined against the US dollar.