European shares fall as Japan move hurts miners

By @ibtimes on

European shares fell early on Monday, giving back a little of last week's strong gains, with miners hurt by falling metals prices after Japan intervened to stem the rise in its currency against the dollar.

At 8:08 a.m., the FTSEurofirst 300 <.FTEU3> index of top European shares was down 0.6 percent at 1,011.77 points, after rising for five straight weeks, with a 4.1 percent gain last week as investors took heart from policymakers' plans to tackle the euro zone debt crisis.

Japan sold the yen for the second time in less than three months after it hit another record high against the dollar. A stronger dollar makes dollar-priced metals costlier for the holders of other currencies and reduces demand.

The STOXX Europe 600 Basic Resources Index <.SXPP> fell 2.3 percent. Heavyweight BHP Billiton fell 2.9 percent.

The main overnight news was the Bank of Japan intervening on the foreign exchanges. The correlation (between the euro and European equities) ensures a weak start for equities, Jeremy Batstone-Carr, strategist at Charles Stanley, said.

He also pointed to doubts about the euro zone plan. Last week we saw a huge rise in equity markets largely on the revelation of a structure of a plan, with no detail on the funding.

(Reporting by Brian Gorman)

Join the Discussion