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Europe: Stocks lower on German data

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Date: Tuesday 26 Aug 2008

LONDON (ShareCast) - European stocks are lower after both the German consumer and business sentiment fell more-than-expected.

The Munich-based Ifo institute's business climate index fell to a three-year low of 94.8 from 97.5 in July. Expectations were of a fall to around 97.1.

Research company Gfk AG meanwhile said economic worries and inflation has resulted in consumer sentiment slumping to the lowest level in five years.

The confidence index fell to 1.5 points for September from a revised 1.9 points in August. Economists predicted the gauge would fall to 2 from an initial August estimate of 2.1

Across the markets, the German Dax is down 13 points to 6283 with the French CAC slipping 32 points to 4322.

In company news, banks are the heaviest losers. Commerzbank was down on the business confidence figures as was Deutsche Bank, while BNP Paribas was also lower.

Allied Irish Banks slumped after Goldman Sachs reduced its earnings forecast for next year and downgraded the Irish bank to “neutral” from “buy.” Staying with brokers, Goldman gave a lift to SSAB Svenskt Staal with an upgrade to “buy” from “neutral.”

Weaker crude oil prices had an impact on oil and energy shares. Total is down while Royal Dutch Shell is also a big loser.

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