14 Aug 2008

Europe shares fall

8:34 am on 14 August 2008

European shares dropped on Wednesday on fresh concern about the impact of the credit crunch on the banking sector.

JPMorgan Chase and Swiss rival UBS have both reported more losses due to their exposure to the crumbling mortgage market in the United States.

JPMorgan Chase says its losses mortgage-linked assets amounted to $US1.5 billion so far this quarter.

The FTSEurofirst 300 index of top European shares closed down 2.4% at 1,179.64 points.

Banks were the worst performing sector: Royal Bank of Scotland fell 6.4%, while UBS, BNP Paribas and Societe Generale fell between 4.9% - 7.3%.

Around Europe: Frankfurt's DAX fell 2.5% and Paris' CAC 40 lost 2.6%.

In Britain, the FTSE 100 ended down 85.9 points, 1.55%, at 5,448.6.

Stocks in the United States have closed lower. According to preliminary closing figures, the Dow Jones Industrial Average finished down 109.26 points (0.94%) at 11,533.21.

The Nasdaq composite ended down 1.99 points (0.08%) at 2,428.62 while Standard & Poor's 500 index dropped 3.80 points (0.29%) to 1,285.79.

NZ & Australia

The NZX 50 index closed down eight points to 3345 on Wednesday on turnover of $111 million.

Fletcher Building finished the day up 15 cents to $6.58 after a 4% fall in annual profit. Telecom was up 5c to $3.38 and Contact Energy was down 10c to $8.45

Goodman Fielder was down 3c to $1.84 after saying it would take a one-off writedown of $A170 million on its Fresh Dairy division in New Zealand because of deteriorating economic conditions and high dairy product prices.

Kiwi Income Property Trust was down 2c to $1.12 after saying it might have to write down the value some of its property assets.

The dollar was buying 68.82 US cents, 79.61 Australian cents, 36.27 pence, 74.90 yen and 0.4615 euro. The Trade Weighted Index was 64.15.

The Australian sharemarket closed sharply lower on Wednesdayy, losing 2% as weaker financial and resource stocks added to the negative direction from Wall Street overnight.

The S&P/ASX200 was down 102 points, or 2.02%, to 4951.6, while the All Ordinaries lost 94.4 points, or 1.85%, to 4995.9.