Wednesday, 22 February 2012

UK stocks: End lower on weak euro zone

Investor Thursday, Feb 23, 2012 at 0535 hrs IST
London: UK Stocks Closing: European shares fell in low-volume on Wednesday for the second consecutive session as euro zone purchasing managers data suggested the region could tip into recession and potentially have a knock on effect to company profits.

Buyers, however, came for Peugeot Citroen which jumped 12.4 per cent in volume nearly seven fold its 90-day average after sources said the car maker was in discussion with General Motors to form a broad manufacturing alliance.

Investor sentiment took a hit after the Markit's Eurozone Services Purchasing Managers' Index (PMI) missed forecasts, raising questions about whether Greece can recover from its economic slump.

The PMIs suggest there is going to be a slow period of economic growth, which opens the danger of weak profits, said Richard Batty, strategist at Standard Life Investments, which has $248.37 billion of assets under management.

There is scepticism over Greece and whether they can deliver the budget cuts, the country has only got through a short-term funding crisis and the does not solve the longer term problems. We are underweight European equities.

The FTS Eurofirst 300 index of top European shares was down 0.7 per cent at 1,077.47 points, although volume was low and benchmark indexes rising trendlines remained intact.