Europe Stocks Fall
European stock markets closed lower on Monday. In London, the Financial Times-Stock Exchange Lost 25.10 points, or 0.53%, to close at 4722.80, as the lower dollar put the brakes on any hopes of the FTSE heading into positive territory. BAE Systems suffered the largest drop on the FTSE 100, losing 4.66%, as investors took a negative view of its update regarding the Eurofighter Typhoon program. The company signalled a progressive reduction in its margins as a consequence of a higher volume of lower margin UK Ministry of Defense support activity and a drop in its Saudi operating margins. Pharma stocks were sharply down after the UK's medicines agency tightened warnings on antidepressants. GlaxoSmithKline and AstraZeneca suffered on the news. Smiths Group jumped 2.09% after agreeing to buy privately-owned medical devices firm Medex for $925 million. HSBC said its chairman David Eldon is to retire at its annual general meeting on May 27, 2005, and will be replaced by Vincent Cheng, vice chairman and CEO of Hang Seng Bank since 1998.
Germany's DAX lost 14.96 points, or 0.18%, to close at 4193.91, as oil prices rose. Trading volume was thin with most institutional investors sidelined, unsure as to the direction of the next move. German Factory Orders rose by an unexpected 1.1% with most analysts having forecast a fall. The rise was fueled by an increase in large-scale domestic contracts. Among local stocks moving today, auto stocks dipped as the euro strengthened. Thyssen rose 0.69% after CEO Schultz said sales could reach 45 billion euros by 2007. Commerzbank edged up 0.33%, the bank said it had sold a 4.3% stake in Brazilian Unibanco for around 66 million euro and was upgraded by UBS.
In France, the CAC-40 lost 16.12 points, or 0.43%, to close at 3767.39, as Wall Street moved lower amid a spike in crude prices and falling drug stocks. An attack on a U.S. consulate in Saudi Arabia pushed oil prices higher ahead of OPEC's meeting on Friday. Merrill Lynch's downgrade of Pfizer and Wyeth weighed on the pharma sector. At home, banking stocks were a drag on the index, although newsflow was limited. BNP-P and SocGen were down 0.66% and 0.63% respectively. Total slipped 0.43% after declaring it will find 2004 difficult to beat as the dollar falls to record lows against the euro. The weak greenback also hurt auto stocks. PSA and Renault were down 1.42% and 0.9% respectively. Luxury goods stocks slipped as Morgan Stanley expressed its cautious view of the industry. LVMH was down 0.93% and PPR was down 0.39%.
Asian markets ended mostly weaker as exporters retreated on worries over the weakness in the U.S. dollar. Japan's Nikkei average dropped, 93.93 points, or 0.84%, to 10981.96, as market sentiment was hurt by a weak U.S. jobs report, which pushed down the dollar against the yen. Toyota Motor slid 1.79% while Sony Corp edged down 0.53%. But Mitsubishi Motor rose 0.89% on reports of a tie-up with Nissan Motor, while Fujitsu Ltd jumped 2% after it said it would form a strategic alliance with Cisco Systems.
Hong Kong's Hang Seng Index, gained 45.02 points, or 0.32% to close at 14,256.86, with gains in financials and utilities being countered by losses in properties and industrial names.
Canada's benchmark TSX/S&P gained 5.04 pionts, or 0.06%, to close at 9,060.70.