Markets Back in the Red on Economic Concerns
European markets closed lower Wednesday, paring back from the previous day's gains, after weak economic data from the U.S. reignited fears of a recession and sparked further dollar weakness.
Deutsche Bank said the credit crisis threatened its profit target for this year, while some of the world's most influential central bankers warned there was no end in sight to the global credit crunch, which dragged on the banking sector.
Shares in Deutsche Bank closed 2 percent lower, while the overall banking sector ended 0.9 percent in the red.
Pharmaceutical stocks also fell after Morgan Stanley cut its price targets on some of Europe's largest drugmakers.
Swiss miner Xstrata's shares fell more than 6 percent after merger talks with Brazil's Vale were called off.
German construction company Hochtief posted a healthy rise in full-year net profit and predicted a better performance in 2008, but the company expects new orders to decline.
In the UK, the Financial Services Authority is due to publish its internal investigation into the Northern Rock crisis.
Supermarket chain Sainsbury's reported better-than-expected sales for the fourth quarterand continues to see strong growth in non-food sales. The company also signed a $2.4 billion property deal with British Land.
On the economic front, German business sentiment unexpectedly hit a seven-month high in March, according to the Ifo institute, despite the strength of the euro versus the dollar, high oil prices and continued concerns over the U.S. economy.
And European Central Bank President Jean-Claude Trichet said Euro Zone growth looked set to moderate, but he reiterated his focus on upside risks to price stability.
Meanwhile, French President Nicolas Sarkozy and British Prime Minister Gordon Brown vowed to boost cooperation between their two counties and Sarkozy said he planed to ask Brown to help get Washington to stop the dollar’s decline.
- Reuters contributed to this report.