Frigging Dubai! I knew it would happen!
Europe shares suffer biggest 1-day drop in 7 mths
Thu Nov 26, 2009 12:55pm EST
By Joanne Frearson
LONDON, Nov 26 (Reuters) - European shares slipped 3.3 percent on Thursday to record their biggest one-day percentage drop in seven months as concerns about debt problems in Dubai weighed on the market, with banks the major fallers.
The pan-European FTSEurofirst 300 .FTEU3 index of top shares closed down 33.81 points at 988.14 -- its lowest close in three weeks.
"The Dubai worries have played a major role in rattling market sentiment at a time when the U.S. is closed and we are not getting anything from anywhere else," said Peter Dixon, economist at Commerzbank.
"It is a day in which market uncertainty has been provoked again. I do not think it really reflects the underlying fundamentals of the economy and the market, it is just a sentiment shock."
Dubai, whose extravagant building projects have been largely put on hold since the start of the global financial crisis, said on Wednesday it would ask creditors at its flagship firms Dubai World and property developer Nakheel to delay repayment on billions of dollars of debt. [ID:nGEE5AP0T2]
Banks took the most points off the index on concerns about their potential exposure to debt problems in Dubai.
HSBC (HSBA.L), Banco Santander (SAN.MC), BNP Paribas (BNPP.PA), Barclays (BARC.L) and Credit Suisse (CSGN.VX) were down 3.3 to 8 percent.
Other financials moved lower on Dubai exposure concerns. London Stock Exchange (LSE.L) fell 7.4 percent and Dutch insurer Aegon (AEGN.AS) lost 7.7 percent.
INFORMA, PORSCHE HIT BY DUBAI WORRIES
Shares in publishing and events group Informa (INF.L), which has many Middle Eastern trade fairs, fell about 9.8 percent.
Porsche (PSHG_p.DE) lost 5.1 percent as traders pointed to worries that Qatar Investment Authority may cut its 10 percent stake in the carmaker to boost liquidity after the Dubai government asked for a debt standstill on two of its firms. Continued...
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