mo-d
22-01-08, 04:55 PM
LONDON/NEW YORK It was a day of bloodbath on the global bourses with US President George W. Bush’s tax plan to revive the world’s largest economy disappointing investors on Monday.
The dollar rose strongly against the euro on the back of the steep losses in global and oil prices fell more than $1 to a one-month low below $89 a barrel, weighed down by concerns that a recession in the US could drag down other economies and hurt oil demand.
US stock index futures were sharply lower, as fears of a recession gripped investors, suggesting Wall Street will join a global equity markets plunge when they resume trading Tuesday.
Volume was active in spite of the US stock market being closed for the Martin Luther King Jr Day holiday.
On stock markets, the worst hit was the Bombay marker, which registered the biggest crash in its history at 11 per cent before paring losses to end down 7.4 per cent. Tokyo tumbled to its lowest level in more than two years.
After heavy losses in Asian trade, it was the turn of the European markets to suffer, wiping out more than $300 billion in market value in their biggest one-day slide since the Sept. 11, 2001 attacks.
Germany’s DAX lost 7 per cent, Britain’s FTSE fell more than 5 per cent and the French CAC 40 dropped almost 7 per cent.
The slide in these three national blue-chip indexes led to a loss in market capitalisation roughly equal to the combined gross domestic product of Ireland and Romania.
The FTSEurofirst index of top European shares closed down 5.3 per cent at 1,286.14 points, having hit an 18-month low of 1,278.79 earlier in the session. London Brent crude was down $1.29 to $87.94.
US light crude for February delivery fell $1.65 to $88.92, the lowest level since Dec. 18, in Globex electronic trading by 1042 GMT.
In European trade, the euro slumped to $1.4491 from $1.4619 in New York late on Friday.
The dollar dipped to 106.18 yen from 106.85 yen late on Friday.
Switzerland’s benchmark index fell over 5 per cent, Milan’s MIB 30 was down 5 per cent and Spain’s Ibex dropped nearly 7 per cent.
In Asian trading, Tokyo’s benchmark index closed down a hefty 3.86 per cent, hitting the lowest point since October 2005.
Asian markets had rebounded at the end of last week on hopes for Bush’s stimulus plan but opened sharply down on Monday after seeing Wall Street’s lack of enthusiasm to the announcement.
Hong Kong shares closed 5.5 per cent lower following a 5.14-per cent plunge for mainland Chinese stocks, which fell mostly on concerns that a massive forthcoming share issue by insurer Ping An could hit demand for other equities.
South Korea closed down 3 per cent at a five-month low, Singapore shed 6.03 per cent and Sydney lost 2.9 per cent.
“Investor scepticism over the impact of a temporary tax cut in saving the US economy from a sharp slowdown in economic growth prompted heavy selling” in equities, said Derek Halpenny of The Bank of Tokyo-Mitsubishi in London.
The foreign exchange market, however, reacted calmly and some dealers described the shares sell-off as another short-lived, knee-jerk reaction which offered a buying opportunity.
“If (US) interest rates are cut to the extent we and other expect, the likelihood is that today’s share prices will look like silly values in 12 month’s time, if not before,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities.
Bush’s package “is seen as too late and not strong enough to make an impact,” said Najeeb Jarhom, head of research for retail clients at Fraser Securities in Singapore.
“It looks like the US is heading for a recession or may be already (is) in recession, looking at the data,” he said.
Investors were also uneasy as it would take another day to gauge further reaction in the United States.
Bush on Friday said his plan would be worth “around 1 per cent” of US gross domestic product and offer tax rebates, incentives for businesses and other measures to encourage growth.
Dealers said they had hoped for surprises in Bush’s much-anticipated announcement, particularly on how to salvage the troubled housing market.
US dealers showed their disappointment, with the benchmark Dow Jones Industrial Average ending on Friday down 0.49 per cent.
“The fall in US stocks reflects investors’ demands for more measures, rather than the health of the economy,” said Mitsushige Akino, chief fund manager at Ichiyoshi Management in Tokyo.
He said the US and Japanese markets were unlikely to fall significantly from current lows ahead of the January 29-30 meeting of the US Federal Reserve.
The US central bank is widely expected to slash interest rates for the fourth straight meeting given the collapse of the beleaguered housing sector.
The US economy has been hit hard by rising defaults in the “subprime” mortgage sector in which Americans with bad credit records are struggling to pay back housing loans given to them during the housing boom.
“Bush’s economic stimulus plan did not surprise the market much and failed to ease investors’ worries over the US economy and subprime mortgage problems,” said Matthew Kwok, research head at Tanrich Securities.
http://www.omantribune.com/index.php...ading=Business
--------------------------------------------------------
MSM
http://msm.gov.om/charts/MSMIndexPerformance.aspx
The dollar rose strongly against the euro on the back of the steep losses in global and oil prices fell more than $1 to a one-month low below $89 a barrel, weighed down by concerns that a recession in the US could drag down other economies and hurt oil demand.
US stock index futures were sharply lower, as fears of a recession gripped investors, suggesting Wall Street will join a global equity markets plunge when they resume trading Tuesday.
Volume was active in spite of the US stock market being closed for the Martin Luther King Jr Day holiday.
On stock markets, the worst hit was the Bombay marker, which registered the biggest crash in its history at 11 per cent before paring losses to end down 7.4 per cent. Tokyo tumbled to its lowest level in more than two years.
After heavy losses in Asian trade, it was the turn of the European markets to suffer, wiping out more than $300 billion in market value in their biggest one-day slide since the Sept. 11, 2001 attacks.
Germany’s DAX lost 7 per cent, Britain’s FTSE fell more than 5 per cent and the French CAC 40 dropped almost 7 per cent.
The slide in these three national blue-chip indexes led to a loss in market capitalisation roughly equal to the combined gross domestic product of Ireland and Romania.
The FTSEurofirst index of top European shares closed down 5.3 per cent at 1,286.14 points, having hit an 18-month low of 1,278.79 earlier in the session. London Brent crude was down $1.29 to $87.94.
US light crude for February delivery fell $1.65 to $88.92, the lowest level since Dec. 18, in Globex electronic trading by 1042 GMT.
In European trade, the euro slumped to $1.4491 from $1.4619 in New York late on Friday.
The dollar dipped to 106.18 yen from 106.85 yen late on Friday.
Switzerland’s benchmark index fell over 5 per cent, Milan’s MIB 30 was down 5 per cent and Spain’s Ibex dropped nearly 7 per cent.
In Asian trading, Tokyo’s benchmark index closed down a hefty 3.86 per cent, hitting the lowest point since October 2005.
Asian markets had rebounded at the end of last week on hopes for Bush’s stimulus plan but opened sharply down on Monday after seeing Wall Street’s lack of enthusiasm to the announcement.
Hong Kong shares closed 5.5 per cent lower following a 5.14-per cent plunge for mainland Chinese stocks, which fell mostly on concerns that a massive forthcoming share issue by insurer Ping An could hit demand for other equities.
South Korea closed down 3 per cent at a five-month low, Singapore shed 6.03 per cent and Sydney lost 2.9 per cent.
“Investor scepticism over the impact of a temporary tax cut in saving the US economy from a sharp slowdown in economic growth prompted heavy selling” in equities, said Derek Halpenny of The Bank of Tokyo-Mitsubishi in London.
The foreign exchange market, however, reacted calmly and some dealers described the shares sell-off as another short-lived, knee-jerk reaction which offered a buying opportunity.
“If (US) interest rates are cut to the extent we and other expect, the likelihood is that today’s share prices will look like silly values in 12 month’s time, if not before,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities.
Bush’s package “is seen as too late and not strong enough to make an impact,” said Najeeb Jarhom, head of research for retail clients at Fraser Securities in Singapore.
“It looks like the US is heading for a recession or may be already (is) in recession, looking at the data,” he said.
Investors were also uneasy as it would take another day to gauge further reaction in the United States.
Bush on Friday said his plan would be worth “around 1 per cent” of US gross domestic product and offer tax rebates, incentives for businesses and other measures to encourage growth.
Dealers said they had hoped for surprises in Bush’s much-anticipated announcement, particularly on how to salvage the troubled housing market.
US dealers showed their disappointment, with the benchmark Dow Jones Industrial Average ending on Friday down 0.49 per cent.
“The fall in US stocks reflects investors’ demands for more measures, rather than the health of the economy,” said Mitsushige Akino, chief fund manager at Ichiyoshi Management in Tokyo.
He said the US and Japanese markets were unlikely to fall significantly from current lows ahead of the January 29-30 meeting of the US Federal Reserve.
The US central bank is widely expected to slash interest rates for the fourth straight meeting given the collapse of the beleaguered housing sector.
The US economy has been hit hard by rising defaults in the “subprime” mortgage sector in which Americans with bad credit records are struggling to pay back housing loans given to them during the housing boom.
“Bush’s economic stimulus plan did not surprise the market much and failed to ease investors’ worries over the US economy and subprime mortgage problems,” said Matthew Kwok, research head at Tanrich Securities.
http://www.omantribune.com/index.php...ading=Business
--------------------------------------------------------
MSM
http://msm.gov.om/charts/MSMIndexPerformance.aspx