View the article online at http://citywire.co.uk/money/article/a585829
Markets fall as Spain plunges into recession
FTSE 100 falls as European demands for harsh austerity measures in indebted Spain pull the country into double-dip recession.
European markets soured on Monday as Spain, which is battling a rising budget deficit with punishing austerity measures, officially entered a double-dip recession.
The FTSE 100 lost 0.68%, or 43 points, to hit 5,734 and the Mid-250 index shed 0.54%, or 62 points, to 11,418. See the FTSE’s performance and the index’s top risers and fallers.
Hedge fund Man Group (EMG.L) slipped 3.5p, or 3.3%, to 103.5p as investors worried that it could be hit by the renewed economic uncertainty, after adding 10% in the past week on bid speculation.
Spain announced that it had entered a recession as the National Statistics Institute revealed that the economy contracted 0.3% in the first quarter of this year.
The news comes after Spain’s debt rating was downgraded two notches by Standard & Poor’s from A to BBB+ over concerns about the country’s growing budget deficit and weak banking system.
Michael Hewson, senior market analyst at CMC Markets, commented: ‘Recent speculation that EU ministers were looking at steps to refocus a policy response more towards growth was shot down by the EU commission who stated that recent press speculation about alternatives to austerity were wide of the mark, and that there was no substitute to fiscal consolidation.’
Other stock markets in Europe also fell back: Germany’s DAX index gave up 0.59% to 6,761, France's CAC 40 index fell 1.64% to 3,212, and the FTSEurofirst 300 index of top European shares dropped 0.63% to 1,045.
In the US personal spending growth slowed from 0.9% in February to 0.3% in March, despite an increase in personal income growth from 0.3% to 0.4% over the same period as consumers reigned in expenditure amid an uncertain economic outlook.
Figures from the Chicago purchasing managers index (PMI) also suggested a weaker growth story, with the reading falling from 62.2 in February to 56.2 in March.
Stateside markets dipped, breaking a four-day high. The Dow Jones Industrial Average declined 0.28% to 13,191, the Standard & Poor's 500 index dropped 0.48% to 1,397, and the Nasdaq Composite index gave up 0.61% to 3,051.
The dollar index, which tracks the greenback’s performance against a basket of major currencies, rose 0.17%.
News sponsored by:
Making the most out of Europe's potential means seeing things differently. Learn more about how BlackRock's focused approach to investing in Europe helps investors unlock the continent's vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the shares
- Whitbread PLC (WTB.L)
- Essar Energy Plc (ESSR.L)
- Gulf Keystone Petroleum Ltd (GKP.L)
- Man Group PLC (EMG.L)
More from us
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add firstname.lastname@example.org to your safe senders list so we don't get junked.