Growth fears hurt Euro marts

LONDON: European stock markets fell heavily yesterday in line with Wall Street and Tokyo after US data showing a surprise contraction in a key industrial region could point to a possibly sharper-than-expected US slowdown.

The London FTSE 100 index of leading shares lost 1.26% to close at 5,822.30. In Paris the CAC 40 fell 1.27% to 5,141.95 while in Frankfurt the DAX dropped 1.32% to finish at 5,883.32.

The DJ Euro Stoxx 50 index of leading eurozone shares slid 1.15% to 3,812.73.

The euro stood at $1.2793.

In New York, stocks extended their losses after a sell-off in the prior session sparked by concerns about weakness in the US industrial sector and its impact on the overall economy.

The Dow Jones Industrial Average lost 0.31% to 11,497.93 in late morning trade and the tech-heavy Nasdaq composite shed 0.97% to 2,215.95.

The broad-market Standard & Poor??™s 500 index retreated 0.40% to 1,312.70.

With no major economic news on tap, sentiment remained weak a day after the market was jolted by a weak industry survey from the Philadelphia Federal Reserve that stoked fears that economic activity is slowing down.

"The drop in the Philly Fed was a substantial one ??“ not seen since early 2001 when the economy as a whole had been in a slowdown and the Fed reacted with inter-meeting rate cuts," said Scotiabank analyst Carolyn Kwan, who argued nonetheless that "the situation today does not share the same hallmarks".

In London, Anglo-Australian mining group BHP Billiton fell 3.17% to 887 pence, while Anglo-American lost 2.78% to 2,134 pence.

Construction material group Hanson was one of only two risers, adding 0.67% to 680.50 pence as talk of a bid from Cemex continued to do the rounds.

In Paris, shares closed sharply lower after Thursday??™s four-month closing high.

Tech stocks were hard hit, with STMicroelectronics off 3.07% at 12.94 euros. Telecoms equipment provider Alcatel was down 1.81% at 9.22 euros and digital technology group Thomson slid 1.53% to 12.22 euros.

There were also heavy losses on stock markets across Europe.

In Madrid the Ibex-35 dropped 0.70% to 12,389.5 points, in Milan the SP/Mib fell 1.01% to 37,855 points, in Amsterdam the AEX fell 1.06% to 472.99 points, and in Zurich the SMI index was down 0.94% to 8,294.48 points.

In Brussels the Bel-20 index closed down 1.03% at 3,988.32, and in Lisbon the PSI-20 was down 0.02% at 10,093.93. ??“ AFP