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European stocks sank the most in five weeks, as Greece’s government called a referendum on its latest bailout package, spurring concern that the country may default. Papandreou’s gambit risks pushing the country into default if voters reject the financial accord. An opinion poll published on Oct. 29 showed most Greeks believe the euro area’s expanded bailout package and debt writedown are negative. Leaders from the Group of 20 meet at a summit on Nov. 3-4 in Cannes, France, a week after the euro area’s authorities pledged to expand their rescue fund to 1 trillion euros ($1.4 trillion). They have already sought financial help from China and cooperation from the International Monetary Fund. German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet tomorrow in Cannes before the summit.
National benchmark indexes tumbled at least 2 percent in all 16 western European markets that were open today, except Iceland. France’s CAC 40 Index dropped 5.4 percent, Germany’s DAX Index lost 5 percent and Italy’s FTSE MIB Index plunged 6.8 percent. Greece’s ASE Index sank 6.9 percent.
Credit Suisse Group AG and Danske Bank A/S led a selloff in lenders, both sliding more than 6.5 percent, after posting earnings that fell short of analysts’ estimates. National Bank of Greece SA sank 15 percent to its lowest price since 1992 in Athens.
Barclays Plc dropped 9.5 percent to 176.8 pence after UBS AG lowered its recommendation for Britain’s second-largest bank by assets to “neutral” from “buy.”
Mining companies declined with copper prices as a report showed a drop in manufacturing in China, the world’s biggest consumer of the base metal. The Purchasing Managers’ Index fell to 50.4 in October from 51.2 in September, the China Federation of Logistics and Purchasing said in a statement. Xstrata Plc declined 6.6 percent to 976.1 pence, Antofagasta Plc retreated 4.5 percent to 1,114 pence and BHP Billiton Ltd., the world’s largest mining company, lost 2.7 percent to 1,915 pence.
Sandvik AB dropped 6.5 percent to 84.30 kronor. The world’s biggest maker of metal-cutting tools posted a 60 percent plunge in third-quarter profit to 626 million kronor ($94 million) after a writedown on goodwill for a business it plans to sell. The company also said it will cut 365 jobs in Sweden.
Daimler AG paced a selloff in carmakers, falling 5.9 percent to 34.81 euros after Barclays downgraded the world’s third-largest maker of luxury vehicles to “underweight” from “equal weight.”
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