16 Jan 2009

European shares close lower for 7th session

7:33 am on 16 January 2009

European stocks slipped for a seventh consecutive session on Thursday due to more anxiety over the global financial sector.

Energy shares also retreated following a sharp decline in crude oil prices.

The FTSEurofirst 300 index of top European shares ended 1% lower at 796.32 points after hitting a six-week low at 788.81. The index fell 4.3% in the previous session on Wednesday's and lost 45% last year.

Banks were the biggest sectoral losers: Lloyds TSB was down 11.7%, Commerzbank 10.8%, BNP Paribas shed 6.6%, HSBC was down 7% and Barclays by 8.2%.

Shares in Deutsche Postbank fell 19% after new terms were agreed for a takeover of the company by Deutsche Bank. Deutsche Bank issued a profit warning on Wednesday.

The European Central Bank cut rates by 50 basis points to 2% - its fourth successive reduction.

In Britain, the FTSE 100 index closed down 59.53 points, 1.4%, at 4,121.11, extending its decline to a seventh consecutive session.

The index is down 15.8% this week after falling nearly 60% last year.

In Frankfurt, the DAX index ended at 4336.73 points, down 85.62 or 1.94%. In Paris, the CAC-40 index closed at 2995.88 points, down 56.12 or 1.84%.

The Swiss market index closed at 5382.44 points, up 3.63 or 0.07%.

Other markets

In Tokyo, The Nikkei average fell 4.92%. The index closed down 415.14 points at 8,023.31 - its lowest close since 5 December.

In Hong Kong, shares shed 3.37%. Nearly $US11 billion of the market capitalisation has been lost in a two-day slide. The Hang Seng Index ended the day 461.65 points lower at 13,242.96.

In Australia, shares posted their biggest single-day drop in more than two months. The S&P/ASX 200 index fell 157.5 points to 3,529.5 - a drop of 4.27% - the biggest fall since 13 November.

The New Zealand sharemarket closed 44 points or 1.58% down, at 2742.