The Wall Street Journal-20080112-Consumer- Food Stocks Fall In Europe- Asian Indexes Slip
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Consumer, Food Stocks Fall In Europe; Asian Indexes Slip
LONDON -- Brokers turned negative on European food and consumer stocks Friday, at least temporarily halting the drive into areas that are less sensitive to slowing economic growth.
In Asia, most major indexes declined as investors focused on the health of the global economy and the extent of subprime-mortgage problems.
The pan-European Dow Jones Stoxx 600 index shed 0.5% to 343.69, its lowest close since Oct. 4, 2006. The index posted its fifth straight weekly loss, a cumulative 7.8% drop.
Friday, it was the turn of some of the region's best-known producers of consumer goods. Unilever lost 5% in Amsterdam, while L'Oreal gave up 5% and Danone fell 3.2%, both in Paris. Brokers noted slowing consumer spending and rising input costs.
Until Friday, European food producers, along with other defensive sectors such as utilities, tobacco and health-care companies, had performed strongly due to their ability to withstand weaker economic conditions.
However, the broker downgrades on the food sector fed into broad concern about slowing earnings trends in a weakening economic environment.
In LONDON, the FTSE 100 index eased 0.3% to 6202, capping a week that saw it decline 2.3%. Premier Foods, a United Kingdom food producer plunged 19% as it warned of rising wheat and dairy prices.
In TOKYO, the Nikkei Stock Average of 225 companies fell 1.9%, or 277.32 points, to 14110.79, its lowest close since Nov. 15, 2005. The index slumped 4% in the week. Shipping stocks also fell as investors continued to fret about the possibility of a U.S. recession. Mitsui O.S.K. Lines lost 4.2%.
In HONG KONG, the Hang Seng Index fell 1.3% to 26867.01. Consumer- goods exporter Li & Fung, whose biggest market is the U.S., plunged 5.9%. The stock has skidded 18% in five sessions. Market heavyweight HSBC Holdings shed 2.1%.
