Techs sink eurostocks, Greenspan cools enthusiasm
Reuters, 01.14.02, 3:46 AM ET
forbes.com
By Huw Jones
LONDON, Jan 14 (Reuters) - Technology shares led European bourses lower early on Monday, mirroring a similar drop on Wall Street after Federal Reserve Chairman Alan Greenspan warned it was "premature" to talk of a recovery in the world's biggest economy.
At 0835 GMT the Eurotop 300 index of Europe's top 300 blue chips was off 1.1 percent at 1,230 points. The narrower Euro Stoxx 50 index shed 1.47 percent.
Europe's biggest technology firms led blue chips lower, with French telecom equipment maker Alcatel shedding 2.8 percent, while Swedish rival Ericsson slid 2.7 percent. Germany's Siemens fell 1.9 percent.
"It's difficult to get too excited today with Wall Street down, and I think we will be drifting a bit," said Nigel Cobby, managing director of European equities at Deutsche Bank.
Spanish shares suffered the additional blow of uncertainty over economic events in troubled Argentina where many of Madrid's top blue chips have operations.
The Madrid IBEX blue chip index was off 1.5 percent.
Argentina's peso currency dived 41 percent on Friday when a devaluation become effective.
Spanish telecoms group Telefonica fell 1.9 percent, while Banco Bilbao Vizcaya Argentaria and SCH bank both shed about two percent.
Greenspan's comments, delivered after Europe closed on Friday, dashed hopes the U.S. economy was showing real signs of turning around, but spurred expectations that more U.S. interest rates cuts are now on the cards or that rates may not go up as soon as the market had been anticipating.
Investors have been scooping up economy-sensitive shares like basic producers, techs, autos and industrials since the end of last year in anticipation of recovery.
The U.S. central bank chairman said the U.S. economy shows signs of stabilizing but significant risks remain. The Fed's interest-rate policy making committee meets on January 29-30.
Deutsche Bank's Cobby said Greenspan had said nothing new, and that the European market would not react too adversely.
"People did not believe the U.S. economy was going to recover soon anyway," Cobby said.
In New York the Dow Jones industrial average closed down 0.8 percent below 10,000 points, and the tech-laded Nasdaq Composite ended 1.2 percent lower. |
