Markets were down sharply across Europe yesterday as the plunging Nasdaq and a continuing lack of direction from the US amid uncertainty over the outcome of the presidential election unsettled investors. In New York, the technology heavy Nasdaq took another beating, giving up 4.1 per cent on 2,755.2.
Technology stocks, in particular, were hard hit in Europe and sentiment worsened following a profit warning from Getronics. The Dutch information technology company, the world's fifth largest computer services provider, plunged 42 per cent after the company warned it would make a loss in the first half of 2001 due to investment costs and stagnant sales.
Germany's Neuer Markt plumbed new depths after its key index fell to an all-time low as panicky investors fled. The Nemax 50 index comprising the top 50 growth stocks in the Neuer Markt - Europe's largest growth market - plunged nearly 10 percent to 3,105.64 points, its largest one-day fall to the lowest level since its launch in April 1998.
Negative company news and a string of cancelled initial public offerings domestically compounded the news from abroad.
Fund managers and other market participants said yesterday's panic was among many institutional and some retail investors.
In Britain, the FTSE 100 slumped to a five-week closing low. Banking stocks knocked 49 points off the blue-chip index, which closed 2.52 per cent lower at 6,221.4. With losers outnumbering gainers by four to one, technology, media and telecom shares (TMT) delivered some 80 points of FTSE downside.
The senior market's weakness was reflected in the Techmark index of technology shares, which ended 175.05 points or 5.76 per cent lower at 2,865.60, its lowest close since the end of May. In New York, blue-chips were also hobbled by concern that Republican candidate Governor George W Bush's lead in the election may be in doubt. Drug and tobacco stocks, which are widely viewed as benefiting from a Republican victory, fell amid fears for future earnings in the sector.
But the Dow's slide was cushioned by a rebound in Coca Cola after it scrapped efforts to buy Quaker Oats.
The US markets will have time to ponder their current malaise as they remain closed today for the US Thanksgiving holiday. Tomorrow brings a shortened session, so it is likely to be next week before investors get some indication as to whether the market has bottomed out . . . and whether the nation has a new president.
In Europe, lack of news from the US is only like to exacerbate the current unease.
