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Brazil fears beat bourses
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January 22, 1999: 5:33 a.m. ET
Latin American concerns hit European auto, banking stocks
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LONDON (CNNfn) - The renewed prospect of a crisis in Latin America sent bourses into a spin in early trade Friday, with investors scouring the markets for companies that are heavily exposed to the region.
Overnight declines in New York and Asia set the tone for a downbeat opening in Europe, with most markets some 2 percent lower, and the Madrid and Milan indexes down almost 4 percent.
In London the FTSE 100 fell almost 2 percent to 5,912.5, while Frankfurt's Xetra Dax dropped 123 points to 5,040.86.
In Paris the CAC 40 slid 2 percent to 4,070.13, and in Zurich the SMI eased 88 points to 7,037.3
Corporate news was thin, but most of it was negative anyway, further feeding the impulse to sell. A press report of a bid in the insurance sector sent Guardian Royal Exchange (GARD) 5 percent higher to 368 pence. The company recently put itself in play, but suspected bidder Royal & Sun Alliance (RSA) dipped 4 percent to 468 pence.
A broker's sell note on Cable & Wireless (CW.) and a generally negative attitude toward Hong Kong-related stocks pulled the shares 5 percent lower to 896 pence. HSBC (HSBA) dipped 4 percent on fears for its lending exposure in emerging markets.
Troubled clothes retailer Laura Ashley (ALY) remained mired at 12 pence, despite Thursday's revelation that ex-presidential candidate and TV evangelist Pat Robertson was joining the board as a non-executive director.
High-flying telecommunications operator Energis (EGS) slipped 3 percent to 1,650 pence after majority shareholder National Grid (NGG) said that was the price at which it would sell off another slice of shares.
In Frankfurt Siemens (FSIE) unveiled figures showing first-quarter sales grew 16 percent. DaimlerChrysler dipped 3 percent on more reports of an impending deal with Japan's Nissan.
Financial stocks headed lower, but the bright spot was the continuing revival of software giant SAP [FSE:FSAP3], which bounced 2 percent.
Sentiment turned with a vengeance against the Paris financial sector. BNP (PBNP) slumped 4 percent, but all of the banks were sharply lower.
Car makers were hit across Europe, despite improved results from Porsche [FSE:FPOR3]. Renault (PRNO) fell almost 5 percent to 42 euros as investors identified the auto maker as heavily exposed to the Brazilian market. In Milan fellow auto group Fiat slipped 4 percent on related fears, a similar-sized fall to Volkswagen (FVOW) stock in Frankfurt.
Swiss stocks were lower across the board, although banks UBS and CS Group bore the brunt of the selling, dropping 2 percent.
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