European Indexes -Weekly Update 11/7/2014
Markets in Europe saw a significant drop yesterday as a range of economic indicators came in under forecast and one of Portugal's major banks had to be suspended.
Banco Espirito Santo of Portugal had to be suspended yesterday as the company's stock dropped 17% after news of accounting irregularities with its parent company were released. Late last year the Portuguese Central Bank ordered an audit of Esprito Santo and then of its parent company which is registered in Luxembourg. Although the authorities have said that cash holdings are not at stake the news still had a major effect on local and European markets.
In reaction, markets in Lisbon fell 4% and the IBEX dropped over 2.7% in intraday trading. The Portuguese government has only just left the bailout program provided by the EU and International Monetary Fund, to the tune of €78bn after they deemed the local economy had turned around.
Economic indicators out of the rest of the Eurozone did little to help the situation as both France and Italy saw factory output fall from April to May. In France output fell 2.3% in May and in Italy it fell 1.2% for the same period.
News out of Germany wasn't much better as Europe's largest economy saw their import figures reduce at its sharpest rate since 2012 and its exports didn't fare much better. Imports dropped by 3.3% and exports fell 1.1%.
The trade deficit in the UK grew to £9.8Bn in May, up from £8.8Bn in April. This was seen as disappointing however it was offset by the UK Services Sector seeing a trade surplus of £6.8Bn.
Markets in Europe are expected to open lower today and we could see some opportunist profit taking as the week closes out.
Key Market Data as of 11/7/2014:
Dow: 16,915.07 (-0.42%) S&
FTSE: 6,672.37 (-0.68%) Dax: 9,659.13 (-1.52%)
Hang Seng: 23,172.75 (-0.29%) Nikkei 15,164.04 (-0.34%)
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