Traders across Europe have seen falling shares
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Stocks across Europe fell sharply on Monday after a number of
negative factors accentuated the after-effects of Wall Street's Friday
falls.
The Dow Jones saw its heaviest one-day loss for two years on Friday, hit by surprise poor results from IBM.
The decline knocked the technology sector across Europe,
and was exacerbated by equally poor figures from Dutch electronics firm
Philips.
Germany's Dax ended down 2.6%, Paris' Cac by 2.1%, and the FTSE by 1.3%.
Slump fears
Shares in Philips dropped 3.6% in early exchanges after
it reported a 79% drop in first quarter profits, blaming weak
semiconductor sales and the falling prices of flat panel televisions.
Added to IBM's results coming in below market
expectations last week, there is concern among investors that the
sector could be seeing the beginning of a slump.
At Monday's close, Germany's Dax was down 2.6% or 110
points to 4,202.2, while in Paris the Cac 40 lost 2.1% or 82.7 points
to end at 3,949.6.
In London the FTSE 100 gave up 1.3% or 64.5 points to
4,827.1, further hit by investor concern that demand had peaked for
steel giant Corus, whose shares finished down 1.5%.
Diplomatic dispute
Shares in Italian car maker Fiat were temporarily
suspended after they dropped 10% to a new all-time low on reduced
confidence in European car sales.
The loss-making firm is struggling to turn around its
fortunes, and analysts said investors were worried that the company had
postponed an annual shareholders meeting without giving a clear reason.
Earlier on Monday, Japan's Nikkei 225 had seen its biggest one-day percentage loss since 10 May, 2004.
In addition to the knock-on effect of Wall Street's
declines fuelling investor concern at a possible economic slowdown in
the US, the Nikkei was affected by the ongoing diplomatic spat between
Japan and China.
China is angry that new Japanese school textbooks gloss
over Japanese atrocities in China in the 1930s, and Japanese investors
are concerned that the row could hit Japan's trade with China, its
largest trading partner.
However, Japanese financial analysts said concern at a
possible slowdown in US consumer spending was the main factor weighing
down investors.
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