The rally in New York came too late for the London market. The FT-SE 100 index ended on Friday 51 points down, contributing to the 0.87 per cent fall on the week to 4621.3. Political instability in Europe rattled investor confidence. Financial stocks suffered the most, but a strong showing by defence and aerospace stocks limited the overall damage.
In France, the CAC Index lost 6.5 per cent on the week to 2583.94, wiping out nearly all the gains the market had made since President Jacques Chirac called the elections on 21 April. The losses were in response to the stronger- than-expected showing from the opposition Socialists in the first round of legislative elections. Thomson-CSF, Credit Lyonnais and other state- controlled companies slated for sale led the plunge on concern that the Socialists will alter plans for asset disposals and other economic reforms.
In Germany, the DAX index fell 1.5 per cent to 3547.84 as the prospect of a Socialist win in France and the dispute between the government and the Bundesbank heightened uncertainty about the future of the single currency and undermined confidence in Germany. Insurer, Allianz led the decline. Copyright: IOS & BloombergReuse content