Monday, September 19, 2011

European shares fall sharply as banks slide

LONDON: European shares fell on Monday, Sept 19 as a regional election defeat for Germany's chancellor Angela Merkel and a cancellation of a U.S. visit by Greek Prime Minister George Papandreou to chair a cabinet meeting raised concerns over the region's debt crisis.

At 0710 GMT, the FTSEurofirst 300 index of top European shares was down 1.5 percent at 923.66 points after rising in the previous four sessions. It rose 0.6 percent on Friday, the highest close in more than a week.

Appetite for riskier assets fell as EU finance ministers broke no new ground in dealing with the euro zone debt crisis in discussions over the weekend, while one Greek media report said that Greece's international lenders presented a list of 15 austerity measures it needed to accelerate as a condition for disbursing a next tranche of bailout funds.

"It's no more a link between markets and economics, but a link between markets and politics. The politicians should have seen the crisis coming and done more, but the problem is they are not proactive," said Koen De Leus, strategist at KBC Securities, in Brussels.

"We are just going from one crisis to another. It's a nightmare for the markets."

Banks, which have a significant exposure to the peripheral euro zone countries, were among the hardest hit, with the sector index down 2.9 percent and Societe Generale down 6.8 percent. - Reuters

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