European close: Dax, Cac post triple digit losses
Date: Wednesday 19 May 2010
The German and French markets closed with triple digit losses on Wednesday after German chancellor Angela Merkel warned that Europe is facing its greatest crisis in decades and could see a possible collapse of the euro.
Her comments followed a shock move Tuesday night by the German financial regulator BaFin to impose a ban on short-selling of European bonds, credit default swaps and ten of Germany’s biggest financial groups. The ban will run until 31 March 2011.
The euro rebounded on rumours that the European Central Bank could take action to put a hold on the single currency's decline. The ECB declined to comment. Meanwhile, the Swiss franc declined against the euro, prompting speculation that the Swiss National Bank is intervening to sell its own currency.
"Every one of us here can feel that the current crisis of the euro is the greatest challenge that Europe has faced for decades, since the signing of the Treaty of Rome," Merkel told the German parliament. "The euro is in danger ... If we don't deal with this danger, then the consequences for us in Europe are incalculable. If the euro fails, then Europe fails."
Across the markets, the Dax in Frankfurt slumped 167 points to 5,989, the Cac in Paris was down 106 points at 3,512. The Swiss market has fallen 96 points to 6,374.
Banks were once again leading the fallers. BNP Paribas, Societe Generale, Credit Agricole and Deutsche Bank were all down.
Elsewhere in the sector, Commerzbank’s chief executive Martin Blessing said the second quarter has “started well”.
BBVA dropped after JP Morgan downgraded the Spanish lender to neutral from overweight.
Air France-KLM saw its fourth-quarter losses widen to €691m and reaffirmed its goal to break even at the operating level in 2011.
CAC 40 - Risers
Suez Environnement Company (SEV) € 15.06 +0.00%
CAC 40 - Fallers
BNP Paribas (BNP) € 46.30 -6.09%
ArcelorMittal SA (MT) € 24.78 -5.67%
Technip (TEC) € 52.99 -5.32%
PPR (PP) € 99.36 -5.01%
Renault (RNO) € 29.49 -4.75%
Saint Gobain (SGO) € 32.33 -4.74%
Societe Generale (GLE) € 35.56 -4.21%
Lafarge (LG) € 46.64 -4.06%
Vallourec (VK) € 153.90 -3.90%
Accor (AC) € 39.47 -3.86%
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