European stocks take a tumble
Europe's main stock markets suffered heavy falls as investors fretted over plummeting share prices in Shanghai, high oil prices and a suicide blast in Afghanistan, dealers said Tuesday.
"The FTSE 100 suffered heavy losses (on Tuesday) under pressure from sliding mining stocks ... after China's main stock index plunged almost nine percent," said Sucden analyst Michael Davies.
Geopolitical concerns loomed large after two members of the US-led coalition and a US contractor died in a suicide blast on Tuesday outside an Afghan base where Vice President Dick Cheney spent the night, the US military said.
London's FTSE 100 index of leading shares tumbled 1.23 percent to 6,355.50 points in late morning deals, Frankfurt's DAX 30 index slid 1.30 percent to 6,936.54 and in Paris the CAC 40 shed 1.45 percent to 5,678.84 points.
The DJ Euro Stoxx 50 index of eurozone blue chip shares lost 1.25 percent to 4,219.06 points.
The euro stood at 1.3216 dollars.
Major US stock indices had ended lower on Monday, as crude oil prices continued to creep higher, erasing early gains inspired by a mammoth private equity deal.
In Asia on Tuesday, the Shanghai stock market's composite index closed down 8.84 percent -- the biggest one-day fall in 10 years -- amid heavy institutional selling and concerns over the launch of index futures.
European share prices weakened as oil prices climbed higher in New York and London. Rising crude prices bite into companies' profits because they increase costs and leave consumers with less disposable income.
The mining sector also plunged in value on reports that the South African government was considering imposing a "windfall tax" on the resource industry.
In London, Xstrata shares plummeted 4.37 percent to 2,540 pence, Lonmin lost 3.65 percent to 3,251 pence and Vedanta Resources sank 3.58 percent to 1,293 pence.
Global steel giant Arcelor Mittal dived 3.10 percent to 39.76 euros in Paris on profit taking, following recent gains that were made on last week's positive earnings guidance for 2007.
In Frankfurt, the share price of Deutsche Boerse plunged 3.74 percent to 153.24 euros as the operator of the Frankfurt stock exchange was also hit by profit-taking.
In Wall Street on Monday, the Dow Jones Industrial Average closed down 0.12 percent at 12,632.26 points.
The tech-rich Nasdaq composite finished 0.42 percent lower at 2,504.52 while the broad-market Standard and Poor's 500 index closed down 0.13 percent at 1,449.37 points.
However, Texas utility TXU's shares rocketed higher in the wake of an announcement by a private equity consortium that it was offering a record 45 billion dollars to takeover the energy firm.
The market's enthusiasm faded as analysts questioned wider corporate earnings growth and as inflation concerns continued to percolate.
In Asia on Tuesday, Tokyo's Nikkei-225 index of leading shares fell 0.52 percent to 18,119.92 points, snapping a three-day winning streak.
Hong Kong's key Hang Seng Index closed down 1.76 percent at 20,147.87 points, dealers said.
AFP
