LONDON (The Deal) -- European markets were down in early trading Wednesday as news of the continued turmoil in Washington once again weighed on sentiment. Fitch Ratings' decision to put the Triple-A rating of the U.S. on negative watch did not help matters.
By mid-morning, London's FTSE 100 was down nearly half a percent at 6519.9, wiping out a part of Tuesday's gain. In Frankfurt, the DAX was down only slightly at 8797.57.
The falls would have been greater if markets were fixated on the U.S. deadlock alone. But in London, for instance, individual rising stocks helped buoy the wider market. U.K. engineering group IMI rose sharply on news it would sell two non-core businesses to Warren Buffett's Berkshire Hathaway (BRK.A) for $1.1 billion and return virtually all that sum to shareholders. Oil and telecoms stocks have also been up as investors look for more defensive positions.
News that Barclays' (BCS) head of compliance, Hector Sants, has been forced to take extended leave to recover from stress failed to dent the British bank's shares. Barclays actually rose in morning trading, perhaps because of wider perceptions that Sants isn't the only guy with stress problems. A Swiss study this morning found that bankers and insurance company staff worldwide are suffering stress related issues -- under pressure not only from their own bosses, but also from angry customers.But in Paris falling demand for luxury goods hit sales at Louis Vuitton Moët Hennessy, which lost nearly 7%. That helped push the CAC 40 down nearly 0.8% to 4222.57. In Asia, a weaker yen, once again, helped sentiment on Japanese exports, and pushed up the Nikkei 225. But Shanghai and Hong Kong both closed weaker.
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