RTTNews - The European markets fell for the first time in three days on Monday, as the world bank lowered its 2009 forecast for the global economy and energy and mining stocks slipped after crude oil and metals prices dropped.
The world bank now forecasts the world economy to shrink 2.9% this year, larger than its earlier prediction of a 1.7% decrease. Global GDP is forecast to rebound with 2% growth next year and 3.2% by 2011.
German business sentiment improved to 85.9 in June from a revised reading of 84.3 in May, a monthly survey the Munich-based Ifo Institute for Economic Research showed today. Economists had expected the index to rise to 85 in June.
Crude for July delivery fell $2.83 to $66.72 a barrel on the New York Mercantile Exchange, by the time the European markets closed, as optimism on the U.S. economy waned and the world bank said the global recession will be deeper this year than it predicted in March.
The FTSEurofirst 300 index of pan-European blue chips closed 2.83% lower at 837.22 points, while the narrower DJ Stoxx 50 index fell 2.52% to 2,084.32 points.
Around Europe, the U.K.'s FTSE 100 index fell 2.57% to 4,234.05, while France's CAC 40 index dropped 3.04% to 3,123.25 and Germany's DAX index slipped 3.02% to 4,693.40.
Heavily weighted oil stocks lost ground after crude oil prices slipped. BP, Europe's biggest oil company, dropped 3.9%, while royal/Dutch Shell, the second biggest, slid 4.7% and Total, the third biggest, declined 3.3%.
Similarly, mining stocks fell after metals prices retreated. BHP Billiton, the world's biggest miner, slipped 4.4%, while Rio Tinto, the third biggest, fell 3.9% and copper miner Antofagasta dropped 7%.
However, Anglo American, the world's third biggest miner, rose 4.6%, as Xstrata, the world's fourth largest copper producer, yesterday proposed a merger of equals with Anglo American. Xstrata shares lost 6.8%.
Renault dropped 7.9% after Standard & Poor's cut its credit rating for France's second biggest carmaker.
Economic sensitive banking stocks also suffered losses. HSBC, Europe's largest bank, fell 2%, while BNP Paribas, France's largest bank, slipped 3.8% and Deutsche Bank, Germany's biggest lender, dropped 6.8%.
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