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Europe extends six-year lows
LONDON, England (CNN) -- European blue-chips hit fresh six- and seven-year lows Monday as falling confidence in insurers such as Swiss Life and nervousness about the growing prospect of a war against Iraq depressed the markets. Deutsche Telekom was hammered more than eight percent late in trading after posting the largest net loss in German corporate history, dragging the Xetra DAX to near eight year lows. In Amsterdam, retailer Ahold ditched 9.7 percent amid unconfirmed reports it knew of accounting irregularities at its U.S. Foodservice unit as early as 2001. More steep losses on Wall Street added to the litany of woes. "It's death by a thousand cuts at the moment," Rupert Thompson, global equity strategist at E+TRADE Securities, told Reuters. He said with the uncertainty surrounding a possible war against Iraq, investors were likely to keep to the sidelines. Frankfurt's blue-chip Xetra DAX index was trading 4.03 percent lower at 2,333.73 points by 1649 GMT, wallowing at its lowest ebb in more than seven years. London's FTSE 100 closed at its lowest level since July 25, 1995, down 1.59 percent at 3,436.00. The Paris CAC-40 closed down 2.38 percent at 2,513.61 and the Swiss SMI closed 3.82 percent down at 3,732.10. At 1630 GMT, with only Frankfurt still trading, the FTSE Eurotop 300 index was down 2.2 percent at 707.32 -- a level not seen since January 3, 1997. The narrower DJ Euro Stoxx 50 index fell 2.6 percent to 1,940.49. The insurance sector bore the brunt of the selling, hit by ebbing confidence in the sector as declining stock markets erode the value of insurers' equity investments. "These insurance stocks are very highly geared to the market and when the market falls they come right down with it and vice versa," said Robert Kerr, European equity strategist at Banc of America Securities. Swiss Life ditched 20 percent after the insurer warned last week it would post a loss double analysts' estimates. A top official at Switzerland's insurance regulator told Reuters said the firm had adequate capital to meet its obligations, but may need to tap investors for fresh cash at a later point. Elsewhere, Dutch insurer Aegon slid 8.4 percent, extending its 32 percent fall last week when the company cut its dividend, while ING and Germany's Munich Re shed eight percent apiece. Deutsche Telekom (FDTE) dragged the telecoms sector lower after announcing a 2002 net loss of 24.6 billion euros, although fourth quarter figures showed the start of a comeback from record losses. The telecoms giant said fourth-quarter core earnings rose 14.6 percent to 4.4 billion euros, beating forecasts of 4.24 billion euros in a Reuters poll of 23 analysts. (Full story) Spain's largest gas company Gas Natural sank 13.1 percent after it confirmed it had launched an unsolicited 15.3 billion euro bid for power group Iberdrola in one of the largest industrial takeover attempts in Spanish history. Iberdrola rose 1.1 percent. Danish drugs group Lunbeck slumped 23 percent after it cut its 2003 profit and sales forecasts.
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