European shares drop after London blasts

7th July 2005, Comments 0 comments

7 July 2005, LONDON - Share values dropped sharply on stock markets around Europe on Thursday, with insurance and travel company stocks particularly taking a blow, in the wake of the series of bomb explosions in London. While Europe's main markets had shed two to four per cent as of early afternoon, politicians urged calm and kept in touch with finance market authorities to monitor developments. In Berlin, German Finance Minister Hans Eichel called for calm and said that finance ministers around Europe wer

7 July 2005

LONDON - Share values dropped sharply on stock markets around Europe on Thursday, with insurance and travel company stocks particularly taking a blow, in the wake of the series of bomb explosions in London.

While Europe's main markets had shed two to four per cent as of early afternoon, politicians urged calm and kept in touch with finance market authorities to monitor developments.

In Berlin, German Finance Minister Hans Eichel called for calm and said that finance ministers around Europe were staying in contact with central bank authorities.

"We should not contribute to the situation getting out of control by taking the wrong actions and reacting in panic," Eichel said about the repercussions of the bomb attacks.

"This is not going to unhinge the world economy," he said, noting that such price fluctuations as seen on the markets did not come as a surprise.

As of early afternoon, London's FTSE-100 index was down 3.4 per cent to 5053 points, with British Airways shares falling nearly 6 per cent to 256 pence.

In Paris, the CAC-40 was almost 3.8 per cent lower at 4119 points, whilc the EuroSTOXX 50 index had lost around 4.3 per cent by early afternoon.

In Frankfurt, the 30-share benchmark DAX had fallen around 3 per cent to 4480 points. Travel concern TUI plunged over 7.7 per cent to EUR 19.45, with a company spokesman calling the reaction of investors "irrational".

Lufthansa stocks had lost 4.6 per cent to EUR 9.71 and reinsurer Munich Re dropped 5.4 per cent to EUR 84.30.

On the secondary MDAX index in Frankfurt, low-fare carrier Ryanair lost 6.5 per cent to EUR 6.

Gold prices meanwhile jumped in a typical market reaction to a sudden crisis. The fine ounce in London gained to 429.05 dollars, after opening at 423.50 dollars.

At the same time, the dollar dropped, with markets quoting the euro at above 1.20 dollars in the early afternoon, up from morning quotations of 1.1935 dollars.

DPA

Subject: German news

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