European Indexes Slammed

A roundup of Wednesday's action on major European exchanges

London

The FTSE 100 closed sharply lower hit by worries of a US recession. Wall Street was off intra-day lows, but traded well below breakeven, supported by financials. Minutes showed the BoE voted 8-1 to hold rates at 5.5%. Along with Mervyn King's comments there are indications that the BoE will not cut interest rates aggressively. Sentiment is still negative after the surprise move to cut rates by the Fed, seen as further evidence of the current risks to the global economy. Oil trades near US$88/bbl. At home, financials were mostly higher, following a series of broker upgrades. PRUDENTIAL (+1.62%) soared on reports from Asia that Ping An may take a 5% stake in the insurer or its rival AVIVA (+2.39%). HSBC (+2.79%) was boosted by positive broker comments. BHP BILLITON (-1.62%) said production in the half year ending 31 Dec was significantly higher in 13 commodities. XSTRATA (+2.80%) gained on rumours of a £40 bid before end of the week. TULLOW OIL (-0.90%) said fiscal 2007 working interest production averaged 73,100 boepd, up 13%. GREAT PORTLAND (+0.80%) posted a 6.5% fall in NAV/sh and noted that portfolio valuation fell 4.1% in third quarter. UNILEVER (-2.32%) is to combine its US foods business. Carlsberg and Heineken are thought to have run into due diligence problems regarding SCOTTISH & NEWCASTLE (-0.60%), according to the FT.

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