Shares on the Dublin and European markets fell today following renewed concerns over the length of the economic slowdown and Washington’s rejection of a restructuring plan for US carmakers.
The Iseq index of Irish shares was almost 2 per cent lower at 2,127 with just five stocks in positive territory.
The pan-European FTSEurofirst 300 index of top shares was down 2.4 per cent at 719.65 points. The index is down 13.5 per cent in 2009, but has risen 11.5 per cent since hitting a lifetime low on March 9th.
Hong Kong's Hang Seng index fell nearly 5 per cent amid concerns about Asia's ability to recover while the US remained weak while the Nikkei also fell after data showed industrial production slumped in February.
Spanish banks fell after the first intervention in a Spanish bank since the start of the global crisis.
Yesterday, the government said the Bank of Spain would take over the running of regional savings bank Caja Castilla la Mancha and would provide funds to help the bank backed by up to €9 billion in government guarantees.
Banco Popular, Banco Santander and BBVA fell between 4.1 and 5.5 per cent.
Britain, too, suffered a financial setback at the weekend with the collapse of the Dunfermline Building Society, a lender. It looks set to be taken over by the Nationwide, after the government failed to bail it out.
Barclays fell 8.3 per cent, after surging 24.1 per cent on Friday. The bank will not participate in Britain's asset protection scheme, according to a Bloomberg report. Also, it was downgraded to “sell” from “hold” at SocGen.
Other European banks to fall included BNP Paribas, HSBC, Societe Generale, UBS and UniCredit, all of which were down between 5.3 and 7.6 per cent.
“There's a worry that the Spanish real estate bubble is going into meltdown,” said Bob Parker, vice chairman of asset management at Credit Suisse.
“And if GM goes into Chapter 11, that could have implications for Europe, with Vauxhall. But let's not forget we had a splendid rally, and the technical indicators showed that, short-term, the market was looking overstretched.”
Wall Street is likely to extend Friday's losses when trading begins at 1.30pm. Futures for the Dow Jones, S&P 500 and Nasdaq were down between 2.3 and 2.5 per cent.
The Barack Obama administration said it would only fund GM for the next 60 days, while it develops a more convincing restructuring plan, with GM chief executive Rick Wagoner forced out and being replaced by chief operating Officer Fritz Henderson.
Reuters