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 

Japanese growth slowdown weighs on world markets

Send a link to a friend

[August 16, 2010]  LONDON (AP) -- World stocks markets mostly fell Monday after figures showed that Japan's economic growth slowed sharply during the second quarter -- adding to fears that the global recovery from recession is losing momentum.

InsuranceIn Europe, the FTSE 100 index of leading British shares was down 31.35 points, or 0.6 percent, at 5,244.09 while France's CAC-40 fell 34.87 points, or 1 percent, to 3,576.04. Germany's DAX was up 3.69 points, or 0.1 percent, at 6,114.10.

Wall Street is also expected to drop further at the open -- Dow futures were down 27 points, or 0.3 percent, at 10,239 while the broader Standard & Poor's 500 futures fell 3.3 points, or 0.3 percent, to 1,072.80.

It's been a fairly quiet start to the week but the news that Japan is hitting a soft patch has compounded market concerns about the global economic recovery. Last week there was a raft of evidence that the U.S. and Chinese economies, in particular, are cooling, though eurozone growth figures provided some encouragement.

Water

"Fears about the state of the global economic recovery will still be the major issue," said James Hughes, market analyst at CMC Markets.

Government figures showed that Japan's economy grew by only 0.1 percent in the second quarter from the previous three month period largely because domestic demand fell. The tepid growth was a sharp comedown from the heady 1.2 percent expansion recorded in the first quarter and was way lower than expectations for a 0.6 percent increase.

The worry in Japan in particular is that exports -- the main reason behind the modest second quarter increase -- will be weighed down in coming months by the export-sapping appreciation in the value of the yen against the dollar. Last week, the dollar fell to a 15-year low of 84.75 yen.

"Slower global growth and a strong yen will hit exports in the second half, making a return to recession ever more likely," said Michael Taylor, an economist at Lombard Street Research. "At the same time, there is no prospect of an end to deflation."

Those concerns continued to weigh on Japan's benchmark Nikkei 225 stock average, which ended down 56.97 points, or 0.6 percent, at 9,196.67.

[to top of second column]

By mid morning London time, the dollar was down 0.5 percent at 85.75 yen, while the euro rose 0.4 percent to $1.2810.

The dollar has been in demand over the last few days, recovering around 5 cents against the euro as investors have sought out the relative safe haven of the U.S. currency in the more fretful economic environment.

Elsewhere in Asia, South Korea's Kospi declined 0.2 percent to 1,743.31 and Australia's S&P/ASX 200 shed 0.5 percent to 4,438.50.

Among the gainers was China's Shanghai Composite Index, up 2.1 percent at 2,661.71 amid hopes credit tightening policies will be eased. Hong Kong's Hang Seng added 0.2 percent to 21,112.12. Markets in Taiwan, Malaysia, Thailand and the Philippines gained.

In currencies, the dollar fell to 85.81 yen from 86.18 yen. The euro rose to $1.2793 from $1.2755.

Benchmark crude for September delivery was up 19 cents at $75.58 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 35 cents on Friday to settle at $75.39 a barrel, its lowest level in a month.

[Associated Press; By PAN PYLAS]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Investments

< 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