European shares drop, US futures fall
Tuesday, 1 September 2009
LONDON, Aug. 31 (Bloomberg): European stocks slipped after the Dow Jones Stoxx 600 Index traded at its most expensive level relative to earnings in six years. China led a retreat in Asian shares, while US index futures also declined.
Allied Irish Banks Plc tumbled 9.2 per cent as former Irish Prime Minister Garret FitzGerald said in the Irish Times that a rejection by lawmakers of Ireland's planned National Asset Management Agency could put the country "into the hands of the International Monetary Fund." L'Oreal SA, the world's largest cosmetics maker, slid 2.2 per cent as ING Groep NV recommended selling the shares. Baoshan Iron & Steel Co. slumped 7 per cent in Shanghai as first-half profit plunged 93 per cent.
Europe's Stoxx 600 fell 0.6 per cent to 236.07 at 9:16 a.m. in London. The gauge has rallied 49 per cent since March 9 as companies from L'Oreal to Goldman Sachs Group Inc. reported higher-than-projected earnings, while the German and French economies unexpectedly expanded. The rally has driven the price- earnings ratio for the index up to 48.6, the highest level since June 2003, according to weekly data compiled by Bloomberg.
"There's a wide consensus saying that sentiment has been running ahead of fundamentals," Vincent Juvyns, a Brussels- based strategist at ING Investment Management, which oversees about $476 billion, said in a Bloomberg Television interview. Stocks' "recovery is probably too fast and too strong. We have to keep an eye on fundamentals."
The Stoxx 600 has added 5 per cent since July 31, the fifth monthly advance since the end of February, as the US economy contracted less than forecast in the second quarter. The Standard & Poor's 500 Index, the benchmark gauge for US equities, has climbed 4.2 per cent in August, heading for its sixth straight monthly gain.
"Heading into September, historically the weakest month of the year for global equities, market professionals are united in their calls for a pullback," Ben Potter, a research analyst at IG Markets in Melbourne, wrote in a report.
Futures on the S&P 500 slipped 0.8 per cent today. The MSCI Asia Pacific Index lost 0.6 per cent as the Democratic Party of Japan's election victory drove the yen higher. The Shanghai Composite Index tumbled 6.7 per cent, the most since June 2008, as measures to curb lending threatened to damp growth in China.
Allied Irish Banks Plc tumbled 9.2 per cent as former Irish Prime Minister Garret FitzGerald said in the Irish Times that a rejection by lawmakers of Ireland's planned National Asset Management Agency could put the country "into the hands of the International Monetary Fund." L'Oreal SA, the world's largest cosmetics maker, slid 2.2 per cent as ING Groep NV recommended selling the shares. Baoshan Iron & Steel Co. slumped 7 per cent in Shanghai as first-half profit plunged 93 per cent.
Europe's Stoxx 600 fell 0.6 per cent to 236.07 at 9:16 a.m. in London. The gauge has rallied 49 per cent since March 9 as companies from L'Oreal to Goldman Sachs Group Inc. reported higher-than-projected earnings, while the German and French economies unexpectedly expanded. The rally has driven the price- earnings ratio for the index up to 48.6, the highest level since June 2003, according to weekly data compiled by Bloomberg.
"There's a wide consensus saying that sentiment has been running ahead of fundamentals," Vincent Juvyns, a Brussels- based strategist at ING Investment Management, which oversees about $476 billion, said in a Bloomberg Television interview. Stocks' "recovery is probably too fast and too strong. We have to keep an eye on fundamentals."
The Stoxx 600 has added 5 per cent since July 31, the fifth monthly advance since the end of February, as the US economy contracted less than forecast in the second quarter. The Standard & Poor's 500 Index, the benchmark gauge for US equities, has climbed 4.2 per cent in August, heading for its sixth straight monthly gain.
"Heading into September, historically the weakest month of the year for global equities, market professionals are united in their calls for a pullback," Ben Potter, a research analyst at IG Markets in Melbourne, wrote in a report.
Futures on the S&P 500 slipped 0.8 per cent today. The MSCI Asia Pacific Index lost 0.6 per cent as the Democratic Party of Japan's election victory drove the yen higher. The Shanghai Composite Index tumbled 6.7 per cent, the most since June 2008, as measures to curb lending threatened to damp growth in China.