Doubts over US rescue plan haunt European markets

European markets continued to slide during trading yesterday as banks slipped over doubts about the United States (US) Treasury’s plan to revive the country’s financial sector.
Although Wall Street opened on a brighter note, investors across the Atlantic worried whether the bailout would be effective enough to justify its US$700bn cost. They also feared bickering lawmakers would dilute the measures’ potency.
As the Federal Reserve chairman warned that a failure by Congress to enact the proposal would have “very serious consequnces” for the American economy, the FTSE Eurofirst 300 was down 1.1 per cent to 1,114.64, recovering from earlier losses of more than 2 per cent.
Frankfurt’s Xetra Dax was flat at 6,108.43 and the French CAC 40 index remained 1.3 per cent lower at 4,169.39.
Financials suffered heavily, as UBS, the world’s largest asset manager, shed 4.3 per cent to SFr19.89. Deutsche Bank fell 4.8 per cent to €52.93 while the Anglo Irish Bank slumped 13 per cent to €4.07.
The French bank Société Générale shed 2 per cent to €63.3 and BNP Paribas was down 2.1 per cent at €64.56.
Germany’s Commerzbank, which agreed to buy Dresdner Bank from Allianz last month, slipped by 1.6 per cent to €15.14.
As copper and aluminium prices fell on worries over slowing demand growth, miners and metal producers fell sharply after significant gains over the past week.

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