Markets slide on US recession fears, IMKB down 3.9 pct
Posted by meb at January 28th, 2008
Global market turmoil continued into a second week as European and Asian markets tumbled Monday in the wake of Wall Street’s sell-off Friday amid persistent worries about a possible US — and worldwide — economic slowdown.
“With no market moving news out today, the slide follows on from losses suffered in the US markets at the end of last week and in Asia this morning,” said Nathan Miller, a trader at CMC Markets in London.
Turkish stocks slipped by 3.94 percent and the İstanbul Stock Exchange (İMKB) benchmark index İMKB-100 plunged by 1,790.56 points to 43,706.68 on Monday. In Europe, the UK’s FTSE dipped 1.9 percent to 5,757.5 around midday. Germany’s DAX slipped 0.9 percent while France’s CAC 40 declined 1.1 percent.In the US, the Dow Jones Industrial Average fell 1.4 percent to 12,207.17 shortly after it opened. In Asia, China’s benchmark index plummeted 7.2 percent to its lowest point in six months on concerns that a recession in the US would mean less demand for Chinese-made products. Investors around the world have been jittery for weeks about a US slump, which would likely weaken demand for exports and drag on global growth. There is also concern about a worldwide credit crunch triggered by rising defaults in risky US mortgages, which has led to mountains of bad assets at major American and European banks. “There’s a lot of uncertainty out there: uncertainty over the US economy, uncertainty over China’s economy,” said Rob Hart, an analyst with Morgan Stanley in Hong Kong. “People are also worried about contagion in Europe. If the U.S slows down, will it trigger a slowdown in Europe?” he said. In Asia, Tokyo’s benchmark Nikkei 225 index fell nearly 4 percent to close at 13,087.91, erasing its jump on Friday, while Hong Kong’s Hang Seng index sank 4.3 percent. Sharpest declines came in China, where the Shanghai Composite index plunged 342.39 points to 4,419.29 amid worries about weaker demand from American consumers. Concerns over the potential impact of a prolonged bout of severe winter weather also took a toll.
Global markets dropped sharply early last week on worries about slower US growth. They rebounded after a hefty three-quarters cut in US interest rates by the Federal Reserve last Tuesday, as well as news of a US stimulus package that Washington is hammering out. But investors in Asia and Europe dumped shares again Monday after Wall Street sank Friday.
source: Today’s Zaman
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