Sponsored by: Investment Center

Something new in your business?  Click here to submit your business press release

Chamber Corner | Main Street News | Job Hunt | Classifieds | Calendar | Illinois Lottery 

World stock markets tumble on US slump, bank woes

Send a link to a friend

[March 02, 2009]  HONG KONG (AP) -- World stock markets tumbled Monday, with Japan's benchmark sinking 4 percent, as the worsening U.S. recession and more evidence of deep rot in the financial industry dashed hopes of a global recovery later this year.

As in U.S., where Wall Street indexes retreated to 12-year lows, investors in Asia and Europe were shaken after figures Friday showed U.S. gross domestic product in the world's largest economy withered at a 6.2 percent annual pace at the end of last year.

HardwareThe decline, worse than most economists had expected, was America's sharpest since 1982.

Aggravating fears that the global economic crisis won't end anytime soon were signs that the world's financial firms, already infused with billions of dollars in government aid over the last year, need still more capital to make up for their colossal losses on bad assets.

As trading opened in Europe, HSBC Holdings PLC, the region's largest bank by market value, announced it would raise $17.7 billion by issuing shares and cut 6,100 jobs in the U.S. after reporting a 70 percent drop in profits in 2008. Its shares plunged more than 10 percent in London.

In the U.S., faltering insurer American International Group was set to get a $30 billion bailout -- its fourth government rescue. That followed last week's news that hobbled banking giant Citigroup Inc. agreed to turn over a huge stake, up to 36 percent, to the U.S. government.

"You're seeing the U.S. is sinking lower and lower, and we're still desperately searching for a bottom," said John Mar, co-head of sales trading at Daiwa Securities SMBC Co. in Hong Kong. "It's death by a thousand cuts, a slow death right now."

In Europe, Britain's FTSE 100, Germany's DAX and France's CAC-40 all fell around 3 percent or more. U.S. futures pointed to more pain on Wall Street Monday.

Earlier in the day, every major market in Asia convulsed with selling, with Japanese and South Korean currencies taking big hits.

Tokyo's Nikkei 225 stock average dropped 288.27, or 3.8 percent, to 7,280.15, while Hong Kong's Hang Seng lost 494.11 points, 3.9 percent, to 12,317.46. Markets in Australia, Taiwan and Singapore shed about 3 percent or more.

In South Korea, the Kospi plummeted 4.2 percent to 1,018.81 as investors dumped the country's currency, the won, which hit fresh 11-year lows on pessimism about the global economy and local fears of a dollar shortage.

Equities markets in the U.S. suffered a similar rout on Friday, when the Dow fell 119.15, or 1.7 percent, to 7,062.93 -- its lowest close since May 1, 1997.

[to top of second column]


The Standard & Poor's 500 index fell 17.74, or 2.4 percent, to 735.09, in its worst finish since Dec. 18, 1996. In a troubling sign, the index fell below its Nov. 21 trading low of 741.02.

With U.S. futures down, Wall Street was poised for more losses. Dow futures were off 122 points, or 1.7 percent, at 6,930, while S&P 500 futures lost 13.9, or 1.9 percent, to 720.30

Investors are increasingly worried because mounting losses in the financial industry raise the prospect of greater government stakes and other capital-raising moves that can ultimately dilute shares and lower their price. As important, the lending markets are likely to remain comatose as long as banks are teetering, making it near impossible for the world economy to stage any meaningful rebound.

Asia's declines were led partly by financial stocks. Leading Japanese bank Mitsubishi UFJ Financial Group dived 6.8 percent, leading Australian investment bank Macquarie Group tanked 7.2 percent and South Korea's Woori Finance shed 6.4 percent.

Oil prices weakened in Asian trade, with benchmark crude for April delivery down $1.69 at $43.10. Last week in the U.S., the contract fell 46 cents to settle at $44.76 a barrel on the New York Mercantile Exchange.

In currencies, the dollar slipped to 97.23 yen from 97.57 yen, while the euro dropped to $1.2598 from $1.2668.

[Associated Press; By JEREMIAH MARQUEZ]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


< Recent articles

Back to top


News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries

Community | Perspectives | Law & Courts | Leisure Time | Spiritual Life | Health & Fitness | Teen Scene
Calendar | Letters to the Editor