Despite rate cut, French shares end the day sharply lower
After a wild roller-coaster ride that began with an 8 per cent nosedive, the Paris Bourse's benchmark CAC 40 ended the day sharply lower, driven by continuing fears about the economy, reported dpa.
The index closed at 3,496.89, off by 6.31 per cent, as declining issues outpaced risers by 9 to 1.
Notations on the CAC 40 board were briefly suspended in the morning because of a rush of sell orders, after the index had plunged more than 8 per cent in the first hour of trading to its lowest level since December 2003.
But shares rebounded strongly after the European Central Bank announced a rate cut, only for pessimism to win out again, as investors heard discouraging forecasts from the International Monetary Fund (IMF) about the global economy.
The IMF warned on Wednesday that the world economies were poised on the brink of a recession, and that the downward economic spiral was unlikely to end before 2010. The IMF also said that euro-zone economies were expected to grow by only 0.2 per cent in 2009.
Industrials were again the hardest hit sector in Paris, with steel giant ArcelorMittal leading the meltdown, off by 17.39 per cent, to 23.00 euros.
French banks also suffered, as Credit Agricole lost 8.24 per cent, to 12.75 euros, and BNP Paribas slumped by 7.3 per cent, to 63.43 euros.