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Tuesday 02nd of December 2008
June 6, 2006

European markets decline


by Elaine Frei

In Europe on Tuesday, equities markets were down on a day when every single sector saw declines in a general sell-off as investors acted on concerns over what they feared might happen to interest rates worldwide. The FTSE Eurofirst 300 declined by 1.9 percent on the day to 1,280.55. In Germany and in France the Xetra Dax and the CAC had each lost over 2 percent by the close.

Ferrovial of Spain was down 4.7 percent to €57.95 on the news that British airports operator had accepted their offer rather than a higher bid from a group led by investment bank Goldman Sachs. The decline came as some analysts expressed the belief that Ferrovial has taken on more than it can handle with the offer. Meanwhile, BAA’s London-listed shares closed below Ferrovial’s bid of 950.25 per share.

Still in aviation-related shares, discount airline Ryanair dropped 1.2 percent to €6.80 despite a full-year earnings report that was a bit better than had been expected. Dresdner Kleinwort Wasserstein reiterated its “buy” recommendation on the air carrier.

European automobile manufacturers saw substantial declines. DaimlerChrysler was down 4.2 percent to €38.33 after Credit Suisse lowered its target share price for the carmaker from €46 to €44. Elsewhere in the sector, Porsche lost 3.4 percent to €748.87, while Fiat dropped 3.3 percent to €10.08 and BMW was 3 percent lower at €37.88.

In the pharmaceutical sector, Irish drug maker Elan lost 16.3 percent to €12.35 after its drug Tysabri, a treatment for multiple sclerosis drug was approved by the US Food and Drug Administration only for use in patients who have not responded to other treatments. Tysabri was taken off the market last year after some patients being treated with the drug experienced fatal side effects. Serono, the Swiss drug maker, added 1.3 percent on the day to SFr796 on a Bear Stearns comment that it did not see the FDA ruling in Elan’s favor as a threat to Serono’s MS drug, Rebif.

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