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Europe slides after Iraq report
LONDON, England (CNN) -- European markets ended down on Monday, as fears over a possible war with Iraq intensified with the release of the U.N. weapons inspectors' report. London's FTSE 100 was down 3.41 percent to 3,480, the lowest level since November 1995 and a record 11-session losing streak. Frankfurt's electronically traded Xetra Dax was also down 2.5 percent (but was not due to close until 1900 GMT) and the CAC 40 blue chip index in Paris fell 3.5 percent to 2,795. The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 3.36 percent to 770 -- at one point falling to the lowest level since April 1997. The index has sank for the ninth straight session. Investors piled out of stocks as the markets braced for a report by U.N. arms inspectors Hans Blix and Mohamed ElBaradei to the U.N. Security Council at 1530 GMT. Blix told the Security Council that Iraq was still resisting international efforts to ensure it disarms. (Full story) Losses were pared shortly after Wall Street opened, as rumours swirled in markets that Iraqi leader Saddam Hussein had accepted an exile deal that would avert war, Reuters reported. "The market appears to be clutching at straws. These rumours have done the rounds before and say more about the fragile state of investors than anything else," said David Thwaites, a European equities strategist at BNP Paribas, told Reuters. Insurers Royal & Sun Alliance, Aviva and Prudential all lost seven to eight percent on concerns they will have to sell down equity holdings to satisfy solvency requirements in the face of plunging share markets. Other financials were in the firing line with Anglo-American fund manager Amvescap down 7.7 percent on concern that share markets have further to fall before they can rally. The other falls were very broad-based, with declining stocks outnumbering rising stocks by more than 20 to one, as each sector in the DJ Stoxx series of European industry sub-indices registered a loss. The technology sector was also among the hardest hit by war fears and comments by Microsoft Chairman Bill Gates who said at the weekend he did not expect any big pick-up in technology spending over the next two to three years. (Full story) The AEX index in Amsterdam was down 0.7 percent and Milan's MIB30 index fell 1.6 percent, while the SMI in Zurich lost 2.9 percent. U.S. stock markets continued to show signs of vulnerability early on Monday, as investors' assumption that war with Iraq is now more likely and getting closer by the day gained footing. Iraq-related news dominated trading, a trend that took the Dow down more than 5 percent and to lows not seen since October last week. At around 10:00 a.m. ET, the Dow Jones industrial average (down 67.95 to 8063.06), the Nasdaq composite (down 9.28 to 1332.86), and the S&P 500 index (down 6.55 to 854.85) were all were lower after selling off in the first few minutes of trading, recouping the initial losses, then retreating once again.
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