LONDON Nov 7 European stocks fell sharply on
Wednesday after persistent worries over the euro zone economy
and fiscal problems in the United States eclipsed initial relief
over U.S. President Barack Obama's re-election.
European stocks had rallied in morning trade and the
FTSEurofirst 300 hit a level not seen for nearly two
months as Obama's win fuelled hopes the U.S. Federal Reserve
would maintain its loose monetary policy.
But a fresh gloomy take on the outlook for the European
economy, this time from the European Commission, which said the
euro zone economy would barely grow next year, kick-started a
long slide into the close for European indexes.
And while investors were relieved over Obama's win, they
remained concerned about the U.S. "fiscal cliff" of about $600
billion in spending cuts and tax hikes set to begin early 2013,
which could jeopardise growth.
"The fact that the election had gone swimmingly, there were
no glitches, it was a clear winner," had helped markets open
higher," Angus Campbell, head of market analysis at Capital
"Then you get the downgrades to GDP for the euro zone and
then you get the U.S. markets opening, and they're the ones that
turned the focus onto the fiscal cliff and suddenly you get this
The FTSEurofirst 300 provisionally closed down 1.4
percent at 1,099.20, while on Wall Street all three major
indexes were down around 2.5 percent.