The Deal: European Stocks Follow Asia, U.S. to the Downside
LONDON (The Deal) -- European markets followed Asia and the U.S. down in early trading on Wednesday, on further concerns about the strength of the Chinese economy and growing unease over the situation in Ukraine.
Mining companies were among the losers in London, as any slowdown in China pushes down the price of resources like copper and iron ore. Copper miner Antofagasta was down 0.77% and Glencore Xstrata fell 1.84%. But much of the fall was led by companies going ex-dividend, including British American Tobacco, Standard Chartered Bank and engineering group Meggitt, all of which dropped more than 3% as investors took their dividend and looked elsewhere for opportunities.
Two big private-equity-backed IPOs -- discount retailer Poundland and pet shop chain Pets at Home caught traders' attention. Poundland, backed by Warburg Pincus, priced at 300 pence and was up 18.6% by mid-morning in conditional trading. Pets at Home, by contrast, priced at 245 pence, but was under water from the start, trading at 234 pence.
In Germany, which would be among the hardest hit of America's allies by any economic sanctions on Russia, the market was down over 1% in morning trading. Ironically, Germany's biggest utility, E.ON rose 0.9% to 13.52 euros after warning earnings will likely fall by 14% this year. Analysts said it could have been worse.Frankfurt's DAX was down 1.08% at 9,207.38. In Paris the CAC 40 was down 1.22% on widespread profit taking at 4,297, and in London, the FTSE 100 was down 0.79% at 6,633. In India, the markets continued their pre-election rally, but in East Asia worries over the China economy continued to depress sentiment. Hong Kong's Hang Seng index ducked sharply below the 22,000 threshold to close down 1.65% at 21,901.95, while in China the Shanghai Composite lost 0.17% to close at 1,997.69 and Japan's Nikkei 225 was down 2.59% at 14,830.39.
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