Peugeot shares plunge after Honda profit warning

Shares in French auto group PSA Peugeot Citroen plunged by 4.54 percent in morning trading on Monday in response to severe financial problems in the group and the depressed world auto market. Peugeot shares were being traded at 5.04 euros, having dropped earlier to 4.94 euros. The price is now at the lowest level since 1985. The company has just been rescued with a state guarantee of 7.0 billion euros ($9.0 billion) for its banking and credit arm, is locked in a restructuring programme involving a plant closure and the loss of 8,000 jobs, and is putting flesh on a strategic alliance with USA group General Motors which stock traders say looks disappointing. Earier, Honda Motor shares in Tokyo after the Japanese automaker warned that its full-year results would be much weaker than forecast, as a trade dispute between Tokyo and Beijing dents sales. Investors dumped the shares, which fell 4.65 percent to 2,399 yen by the close in Tokyo, on news that the maker of the Accord and Civic would report an annual profit that was 20 percent lower than previously expected -- even as its first-half profit more than doubled to $2.7 billion.