European Markets Fall As Credit Fears Continue - European Commentary

The European markets fell sharply again on Friday, on continuing credit concerns that stemmed from crisis in the U.S. subprime mortgage market. Central banks in Europe, the U.S. and Japan pumped money into credit markets to help meet demand for cash. The Bank of Japan added 1 trillion yen ($8.5 billion) to the country's financial system. The U.S. Federal Reserve has added $43 billion in temporary funds over the past two days, and the ECB loaned 61.05 billion euros ($83.6 billion), putting funds into the banking system for a second day. Crude for September delivery fell $0.71 to $70.88 a barrel on the New York Mercantile Exchange, by the time the European markets closed, as traders speculated demand has peaked for the summer driving season. The FTSEurofirst 300 index pan-European closed 2.86% lower at 1,482.14 points, while the narrower DJ Stoxx 50 index fell 3.24% to 3,630.04 points. Around Europe, the U.K.'s FTSE 100 index dropped 3.71% to 6,038.30, while France's CAC 40 index slipped 3.13% to 5,448.63 and Germany's DAX index fell 1.48% to 7,343.26. Banks were among the worst hit. Barclays, Britain's third biggest bank, dropped 6.4%, ABN AMRO, the biggest Dutch bank, fell 3.5% and Societe Generale, France's second biggest lender, slipped 5%. Deutsche Bank, Germany's biggest bank, fell 3.5% and BNP Paribas, France's biggest, lost 4.4%. Hedge fund manager Man Group tumbled 9.1% after reports said that Man Group indefinitely delayed plans to sell shares of Man Dual Absolute Return Fund in the U.S. because of volatile markets. Mining shares slipped after metal prices fell in London. BHP Billiton, the world's biggest miner, dropped 6.7%, while Rio Tinto, the third biggest, slipped 6.2% and copper miner Antofagasta fell 4.9%.