 |
World markets sink amid economic pessimism
 |
Associated Press- World stocks sank Thursday after an uneven day on Wall Street added to pessimism about the global economic outlook and Japan announced that exports had fallen for the fifth straight month in July.
Oil prices slipped below $87 a barrel while the dollar was higher against the euro and the yen.
European shares opened lower after an initiative unveiled in Paris on Wednesday to improve Europe's fiscal picture failed to assuage fears that the continent's debt crisis was headed to a blowup.
Britain's FTSE 100 lost 1.1 percent to 5,273.42 and Germany's DAX fell 1.5 per cent to 5,852.32. France's CAC-40 was down 1.5 per cent at 3,206.60. Ahead of the opening bell on Wall Street, Dow Jones industrial futures were down one per cent to 11,264 and S&P 500 futures slipped 1.2 per cent to 1,175.20.
The picture was not much better in Asian trading. Japan's benchmark Nikkei 225 closed down 1.3 percent to 8,943.76 after the Finance Ministry said July exports fell 3.3 per cent from a year earlier to 5.78 trillion yen ($75.6 billion US). The downturn was largely due to the strong yen and the ongoing impact of the March 11 earthquake and tsunami.
South Korea's Kospi lost 1.7 per cent to 1,853.08.
Hong Kong's Hang Seng shed 1.3 per cent at 20,016.27, although shares of stock market operator Hong Kong Exchanges and Clearing Ltd. jumped 3.6 per cent after it announced it is in talks with counterparts in mainland China to set up a joint venture to develop new financial products. Ping An Insurance Co. of China Ltd. lost three per cent even though it announced a 33 percent increase in first-half profit.
Tech shares battered
Technology shares were battered after Dell Inc. on Wednesday cut its prediction for revenue growth this year. South Korea's Hynix Semiconductor plummeted 12.2 per cent and Samsung Electronics Co. tumbled 5.7 per cent. China's Lenovo Group, the world's No. 3 personal computer manufacturer, fell 6.5 per cent.
Meanwhile, sentiment in Australia was dragged down by disappointing corporate earnings. The S&P/ASX 200 fell 1.2 per cent to 4,251.20.
"What we've seen is companies on the whole not beating earnings estimates during reporting season, and that's probably leading people to rethink valuations given the strong performance of the past few days in the markets," said Tim Schroeders, who helps manage $1 billion Australian dollars at Pengana Capital Ltd. in Melbourne.
Mainland Chinese shares lost ground Thursday for a third straight trading day on concerns over a possible interest rate hike and new restrictions aimed at cooling housing prices.
The Shanghai Composite Index lost 1.6 per cent to 2,559.47 and the Shenzhen Composite Index lost 1.8 per cent to 1,142.91. Shares in building materials, furniture, and cement weakened due to the worries over fresh limits on real estate investment.
"Real estate shares are not among the biggest losers as they did not gain much earlier," said Hu Yi, an analyst at China Jianyin Investment Securities, "If there is an interest rate hike, there will be a rally after the loss since investors are expecting it will be the last interest rate hike for this year."
China Shenhua Energy Co. Ltd. slipped 4.5 percent while Huaxin Cement Co. fell 6.8 percent. Poly Real Estate dropped 4.4 per cent and property industry leader China Vanke fell one per cent.
On Wednesday, in New York, the Dow Jones industrial average rose 4.28 points to 11,410.21. The S&P 500 rose 0.1 per cent to 1,193.89.
The Nasdaq composite fell 0.5 per cent to 2,511.48.
TSX gains ground
The Toronto Stock Exchange closed higher as commodity prices gained some ground.
The S&P/TSX composite index rose 48.9 points, or 0.4 per cent, at 12,579.6, after gaining as much as 185 points earlier.
Economic growth is weak around the world, and some economists worry that a second recession may be coming. Later Thursday, investors will turn their attention to the U.S. Labour Department, which will release weekly claims for unemployment benefits. High unemployment is a major reason why growth in the U.S. has stalled and jobs data is carefully monitored for any changes.
Investors also have worries about Europe. Some countries have borrowed so much that they may not be able to repay their bonds, and economic growth there has slowed. Concerns about a possible default by a European country have dominated the market in recent weeks.
Benchmark crude for September delivery was down 60 cents to $86.97 in Asia. The contract settled at $87.58 per barrel on the
New York Mercantile Exchange on Wednesday. The euro dropped to $1.4446 from $1.4451 in late trading in New York. The dollar strengthened to 76.60 yen from 76.48 yen.
The Canadian dollar was up 0.25 of a cent at 102.07 cents US.
392 page views
|
|
|
|