European stocks fall on China and Ireland worries
City Index November 12, 2010 8:20 PM
<p>Investors dumped stocks going into the London close on Friday after hotter than expected Chinese inflation data sparked fears that the PBC would have to […]</p>
Investors dumped stocks going into the London close on Friday after hotter than expected Chinese inflation data sparked fears that the PBC would have to start hiking rates more aggressively than first thought.
Commodity stocks bore the brunt of the sell off with the mining and metals sectors dropping in-line with bullion prices.
Bank shares also came under pressure on continued Euro-zone debt worries before staging a late recovery into the close.
Rumour and counter rumour swirled round stock markets today regarding the state of Ireland’s debt problems and if an EU rescue operation would soon get under way for the troubled country.
After hitting a fresh multi month low earlier this morning the price of the Euro took off against the Dollar as speculators citied a New York think-tank report that an €80 billion Euro-zone bailout had already been agreed for Ireland. However most asset classes soon came back under pressure after the Irish finance ministry denied the rumour.
University of Michigan sentiment index, released at 14:55 London time, rose in line with median forecasts to 69.3 for November, up from October’s reading of 67.7.
In a classic case of buying the rumour then selling the fact, the S&P traded up to session highs just before the release of the number, before selling off after the data hit the wires.
Market rumours that a whisper number of above 70 had been doing the rounds, possibly causing the brief run-up in stock prices.
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