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Friday, 05 June 2020

European shares slide as economic outlook worsens

Main index hits a five-month low after new figures show a slowdown in eurozone manufacturing

Reuters, Friday 1 Jun 2012
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European shares fell to a fresh 5-month low on Friday on growing signs that the debt crises in Spain and Greece were hurting the region's biggest economies, with many traders opting to stay away from equities in favour of cash or bonds.

The FTSEurofirst 300 index fell as much as 1.6 per cent to an intraday low of 957.64 points - its weakest level since 20 December. The index was down 1.5 per cent at 958.88 points by mid-morning trade.
 
Germany's DAX, which has been Europe's best-performing benchmark stock market so far this year, also fell sharply as data showed that Germany's manufacturing sector had contracted at the fastest pace for almost three years in May.
 
A separate business survey also showed that the eurozone's manufacturing sector contracted at its steepest pace in nearly three years in May, while Italy's April jobless rate reached a new record high of 10.2 per cent.
 
"Overall, this is really part of a clear sign that on most fronts, we are in a weakening economic environment," said Cyrille Urfer, head of asset allocation at Swiss bank Gonet & Cie.
 
The DAX was down by 2.6 per cent, and Urfer said he remained underweight on equities, preferring cash and safe-haven bonds such as U.S. Treasuries in the current uncertain climate.
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