BUSINESSTUESDAY, SEPTEMBER 29, 2015

LONDON: European shares fell yesterday, withminer Glencore seeing nearly a quarter of itsvalue wiped out by debt concerns and car-maker Volkswagen , which has been hit by anemissions data scandal, extending losses.

The pan-European FTSEurofirst 300 indexwas down 1.1 percent, while the euro zone’sblue-chip Euro STOXX 50 index fell 1.65 per-cent, with both markets retreating after risingby around 3 percent on Friday. European stockmarkets have steadily lost ground from peaksreached in April, partly due to concerns aboutan economic slowdown in China.

“Overall sentiment remains negative fornow while there is much talk about a squeezeon earnings and lower economic growth inthe months ahead,” said Peregrine & Black sen-ior sales trader Markus Huber. Over the week-end International Monetary Fund headChristine Lagarde said the IMF was likely to

revise downwards its estimates for global eco-nomic growth due to slower expansions inemerging economies.

Glencore fell 21 percent after a bearishInvestec note questioning the mining group’svalue given its high level of debt and the con-tinued slump in metal prices. The stock wasset for its worst one-day drop ever.Volkswagen shares were among the worstperformers in Europe, falling 5.7 percent totheir lowest levels in 4 years after two Germannewspapers reported on Sunday that the car-maker’s own staff and one of its supplierswarned years ago about software designed tothwart emissions tests.

VW shares have fallen by more than 30 per-cent over the last week after the companyacknowledged installing software in dieselengines designed to hide their emissions oftoxic gasses. Spain’s benchmark IBEX index

outperformed with a 0.55 percent decline,after Catalan secessionist won a majority ofseats in a regional vote but were not seen tohave a clear mandate to push for independ-ence. Spanish banks outperformed theirEuropean peers, led by gains in Sabadell andBankinter, helped by plans by Spain to changetax rules for Deferred Tax Assets (DTAs), amove the government said would strengthenstheir solvency. Vodafone fell 3.9 percent afterthe mobile phone group said it had endedtalks with Liberty Global about exchangingassets to better compete in Europe’s converg-ing telecoms and media markets.

However, there were signs elsewhere thatmerger activity remained alive, with SAB Millershares rising 2.7 percent after the SundayTimes newspaper reported that Anheuser-Busch InBev SA could bid about $106 billionfor SABMiller within days.

Dollar rises on rate hike talkAn uptick in US economic growth

increased expectations the Federal Reservewill raise interest rates by year-end and sup-ported the dollar yesterday, while Shanghairecouped early losses despite more disap-pointing China data. Dealers will closelywatch the release of key US data this week,including employment, that will provide abetter idea of when the central bank willannounce lift-off.

Thursday will also see the Bank of Japanrelease its Tankan survey of business confi-dence, with analysts forecasting a dip in reac-tion to China’s growth slowdown which hasrattled global markets.

St Louis Fed chief James Bullard on Fridayraised the prospect of a lift in US borrowingcosts when he said he would “like to getgoing”. His comments reinforced the view thatmonetary policy would be tightened before2016. Fed boss Janet Yellen said Thursday sheexpects a hike by year-end, pointing to recentstrong data. On Friday the CommerceDepartment said the US economy grew 3.9percent in April-June, up from the 3.7 percentoriginally stated thanks to a boost in invest-ment and consumer spending. Attention willnow turn to next Friday’s non-farm payrollsresults, with a strong figure likely to reinforcecalls for an early rate move. On forex marketsthe dollar rose against most emerging curren-cies. The Malaysian ringgit lost 0.45 percent,Taiwan’s dollar shed 0.29 percent and the Thai

baht was 0.31 percent lower. However, theIndian rupee and Indonesia’s ringgit edged upslightly from morning selling.

‘Super-sensitive’ The euro also weakened, to $1.1168 from

$1.1202 in New York. However, the greenbackeased to 120.26 yen from 120.49 yen Friday asuncertainty on trading floors led investorsinto safe-haven assets. Stock markets weremostly in the red on the prospect of higherUS interest rates-which would hurt invest-ment in the region-and fears over China’slong-running woes, which have sent worldmarkets tumbling for weeks. On Wall StreetFriday the Dow ended slightly higher but theS&P 500 and Nasdaq retreated. “Everyone issuper-sensitive to China at the moment,” ChrisWeston, chief market strategist at IG, toldBloomberg TV. In Asia Monday Tokyo ended1.32 percent lower as the stronger yenweighed on exporters, while in late tradeSingapore was 1.34 percent down. Manilaended 1.47 percent lower, Jakarta shed 2.11percent and Bangkok was 1.79 percent down.However, Sydney added 1.42 percent by theend of the day. Hong Kong, Seoul and Taipeiwere closed for public holidays. Shanghaistaged a recovery after a morning sell-off,ending 0.27 percent higher despite datashowing China’s crucial industrial companiessaw profits fall 8.8 percent in August-hit bylast month’s shock yuan devaluation, weakdemand and plunging stocks. — Agencies

European shares led lower by Glencore, VW