The oil stocks fell heavily on the market as crude oil prices hit 12-year lows, while among the technology stocks, Internet shares fell sharply, after an early rally, as investors moved back into the Government bond market, where prices rose as the inflationary outlook appeared to improve.
However, banking, petrochemical and industrial stocks in Europe were seen to hold upside potential following market talk of further mergers and acquisitions.
The US stock market has sustained its heaviest fall in two months, with the Dow Jones index falling 216.53 points to 9116.53, a fall of 2.32 per cent. With the technology sector suffering heavily, the NASDAQ market sustained a heavier 3.32 per cent fall.
The oil stocks fell heavily on the market as crude oil prices hit 12-year lows, while among the technology stocks, internet shares fell sharply, after an early rally, as investors moved back into the Government bond market, where prices rose as the inflationary outlook appeared to improve.
Oil prices fell to historic lows yesterday, reminding investors of the benign inflationary outlook, but raising fresh concerns about the outlook for emerging market commodity exporters. US stocks were also hit by profit-taking after recent rises.
In Europe, stock markets suffered limited losses, when merger mania yielded to profit-taking, and Wall Street opened weaker.
Banking, petrochemical and industrial stocks in Europe were however seen to hold upside potential following market talk of further mergers and acquisitions.
French oil firms Elf and Total continued to outperform in France on speculation of a tie-up with Belgium's Petrofina, against the backdrop of the Exxon/Mobil merger talks.
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