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Live update | Global markets

Live update | Global markets
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First Published: Mon, Aug 08 2011. 11 30 PM IST

Updated: Mon, Aug 08 2011. 11 30 PM IST
European shares tumble to 2-year lows
European stocks touched their lowest level in nearly two years on Monday as rating agency Standard & Poor’s (S&P) move to downgrade US debt ignited concerns that the world’s biggest economy could slip back into recession.
The FTSEurofirst 300 index of top European shares closed 4% lower at 936.29 points after hitting 935.83 -- a two-year low. Volumes were 186% of its 90-day daily average. The index saw its biggest one-day percentage decline since March 2009.
Automobile and mining shares bore the brunt of the sell-off, down 8.1% and 6.3%, respectively, on escalating fears that slower global recovery would hit demand for vehicles and raw materials.
The market saw a bounce in early session on the European Central Bank’s decision to buy Spanish and Italian bonds to halt contagion from the euro zone debt crisis, but nervousness soon crept in. The move failed to lift sentiment, battered in the past days on bleak economic numbers and debt fears in the United States and Europe.
Greek shares fall 6%, short-selling banned for 2-month
The Athens bourse index closed down 6% on Monday at a fresh 14-year low, a fall nearly twice as steep as that of European peers, after the US credit rating downgrade late on Friday and on concerns over the impact of an upcoming bond swap on Greek banks.
Short-selling will be banned on the Athens bourse for two months starting 9 August, Greece’s financial regulator said on Monday in an effort to stem a stockmarket slump.
This is the third time since the eruption of the global economic crisis in 2008 that Greece has prevented short-term bets against its stocks as the debt-laden country struggles to avoid default.
The watchdog announced the measure after the Athens general index dropped below the psychologically important 1,000 points level.
Wall Street sinks further
US stocks tumbled further on Monday, the first session after rating agency S&P cut the top-tier AAA credit rating of the United States, further unnerving already-skittish investors.
The Dow Jones industrial average dropped 318.48 points, or 2.78%, to 11,126.13. The Standard & Poor’s 500 Index fell 39.40 points, or 3.29%, to 1,159.98. The Nasdaq Composite Index lost 86.21 points, or 3.40%, to 2,446.20.
Market sectors sensitive to economic health, such as banking and commodities, were among the hardest hit, with the S&P materials index dropping 3.7% and the KBW Bank index slumping 4.9%.
Among individual stocks hard hit, United States Steel Corp slumped 7.6% to $30.66, while Bank of America Corp dropped 9.5% to $7.39.
The losses on Monday came on the heels of Wall Street’s worst week in more than two years on lingering concerns about flagging economic growth and fears of a financial meltdown in the euro zone.
Frankfurt, Paris stocks down more than 4%
Frankfurt and Paris stocks fell by more than 4% in afternoon trading on Monday, following the opening on Wall Street.
At around 1435 GMT, the DAX index in Frankfurt fell by 4.19% to 5,975.98 points, and the CAC 40 in Paris fell by 4.08% to 3,144.69 points.
US stocks plunge on downgrade
The Dow Jones Industrial Average fell 1.3% in opening trade Monday, less than had been feared after late Friday’s historic downgrade of the US credit rating by S&P.
The Dow was off 177.56, or 1.55%, to 11,267.05 in the first 15 minutes of trade.
The broader S&P 500 dropped 1.76% to 1,178.27, while the tech-heavy Nasdaq Composite plummeted 1.89% to 2,484.50.
Traders work on the floor of the New York Stock Exchange at the opening bell on 8 August. (Stan Honda / AFP photo)
Standard & Poor’s lowered the US long-term sovereign debt rating from AAA to AA+ after markets closed Friday, citing Washington’s inability to rein in its mounting deficits.
Traders worried that the downgrade would hit the bond markets as well.
But the yield on the 10-year Treasury fell to 2.47% from 2.56% late Friday, while that on the 30-year bond edged down to 3.80% from 3.82%. Bond prices and yields move in opposite directions.
Gold, another safe-haven asset, hit a new intraday high of $1,715.75 on the spot market in New York. (AFP)
Gold hits peak, oil slumps on debt, growth fears
Gold soared to an all-time high on Monday as investors sold off other commodities from oil to grains, fleeing from riskier assets after the US loss of its prized AAA credit rating stoked fears about economic growth.
Gold broke through the $1,700 per ounce barrier for the first time, extending its bull run as a safe haven asset after agency Standard & Poor’s (S&P) cut its rating for US debt late on Friday.
Oil was hard hit, sliding over 4%, while industrial metals and agricultural commodities piled up losses as a deepening debt crisis in the United States and Europe fanned worries that a global slowdown would erode demand for raw materials.
A move by the European Central Bank to intervene in Spanish and Italian bond markets coupled with a pledge by G-20 members to take action to ensure market stability helped steady markets and limit the downside, but most commodities were expected to see more losses. (Reuters)
Athens stocks drop more than 5%
The Athens stock exchange fell more than 5% in afternoon trading amid high volatility following the US credit rating downgrade and the continuing eurozone debt crisis.
Shares in Athens were down 5.52% at 1,003.35 points at 1350 GMT. (AFP)
Traders work during the afternoon session at the Istanbul Stock Exchange on August 8. (Osman Orsal / Reuters photo)
Paris down more than 3% shortly before Wall Street opens
Shares on the Paris bourse dropped by more than 3% shortly before Wall Street opened, but quickly clawed back some ground.
At 1304 GMT the CAC 40 was down 2.68% to stand at 3,190.73 points, with intervention by the European Central Bank insufficient to dissipate concern over the United States’ loss of its top AAA credit rating. (AFP)
Wall Street set to dive after S&P downgrade
Wall Street was set to track a sharp drop in global equity markets on Monday after rating agency Standard & Poor’s cut the top-tier AAA credit rating of the United States, rattling already-jittery investors.
Standard & Poor’s move came late Friday after a wild week for Wall Street -- its worst in more than two years -- as lingering concerns about sluggish economic growth and heavy public debt loads in developed economies hit sentiment.
The impact of S&P’s rating cut was felt in Asia and Europe. Japan’s Nikkei stock average slid 2.2 at the close on Monday, while the FTSEurofirst 300 index of top European shares fell 2.1% in early trading. MSCI’s all-country world stock index dropped 1.2%.
In US trading, market sectors most sensitive to the economy, such as the banking and natural-resource sectors, were set to take the brunt of selling. United States Steel Corp fell 5.8% to $31.30 in premarket trading, while Citigroup Inc dropped 4.8% to $31.82. (Reuters)
US unease hits stocks; ECB supports Italy, Spain
Deep-rooted jitters about the US debt rating cut sent world stocks tumbling towards 11-month lows on Monday, overshadowing relief that the European Central Bank was buying bonds of strugglers Italy and Spain.
Having seen some $2.5 trillion wiped off its global share values last week, MSCI’s all-country world stock index was down a further 1%.
Wall Street, meanwhile, looked set to add to the rout with S&P 500 futures down around 2.5%.
European share measured by the FTSEurofirst 300 index were down 2% after earlier registering gains on the ECB action, intended to take the heat out of the spreading euro zone debt crisis.
ECB buying was lifting some peripheral bond prices. Yields on five-year Italian and Spanish bonds were down around 70 basis points, spreads against German debt narrowed and the cost of insuring Spain and Italy against default dropped. (Reuters)
Concerns about weakening growth saw ‘safe haven’ investment gold shoot to record highs above $1,700 an ounce. The euro was down against the dollar after initial gains, while oil slumped.
“It looks like we are in for another volatile week,” said Dermot O’Leary, economist at Goodbody Stockbrokers in Dublin. (AFP)
A man looks at the index at the Warsaw Stock Exchange on August 8. (Peter Andrew / Reuters Photo)
French stocks turn lower, down 1.83%
French share prices reversed direction Monday, falling 1.83% by midday after having rallied initially by slightly more than 1.0%.
The Paris market was erratic, as others in Europe, after sharp falls in Asia after an unprecedented US ratings downgrade and a European Central Bank decision to support the market for bonds issued by distressed eurozone countries.
Financial markets begin the week in deep uncertainty about weekend official statements on containing the eurozone debt crisis, Standard & Poor’s downgrade of its rating for US debt from triple A and the risk that there could be a fresh economic downturn. (AFP)
A stock trader points to a graph of activity on the French Stock Exchange in Paris on 8 August. (Michel Euler/ AP photo)
Swiss stocks down across the board in rollercoaster trade
Swiss stocks plunged back into negative territory during Monday midday trade, as initial euphoria following the European Central Bank’s pledge to boost eurozone bond markets wore out.
The Swiss Market Index opened in the red before quickly turning positive.
But by midday, it plunged back down 1.60% o 5,089.45 points, with bank shares, which were up in the morning, also giving up gains as concerns over the global economy took hold.
UBS shares were down 0.54% to 10.96 francs while Credit Suisse slipped 0.71% to 23.64 francs.
A combination of four pictures shows a share trader reacting as he looks at his trading monitors during early morning trading at Frankfurt’s stock exchange on 8 August. (Kai Pfaffenbach / Reuters photo)
Pakistani stocks ends flat; recovers from early losses
Pakistani stocks ended flat on Monday, recovering from an early decline of more than 2.6% after bargain hunters snapped up cheap shares, dealers said.
The Karachi Stock Exchange’s benchmark 100-share index closed 0.4%, or 4.96 points, higher at 11,380.05 on turnover of 106.74 million shares.
The KSE-index took its cues from regional markets in early trade, which declined after the US credit rating downgrade.
“Investors started accumulating shares at lower levels which led to the recovery at the local bourse,” said Sajid Bhanji, director at Arif Habib Ltd.
On Friday, the KSE-index closed at a more than a four-month low.
Greek stock market tumbles
Shares on the Athens Stock Exchange are plunging, with the general price index down 4.8% at levels not seen since the mid 1990s. The general index stood at 1,011.70 as global stock markets continued their recent slide following Friday’s downgrade of US debt by Standard & Poor’s.
Debt-ridden Greece became the first European Union country to seek an international bailout last year, when it saw its borrowing costs spiral out of control as investors doubted the country could repay its massive debts.
The financial crisis has also affected other eurozone countries, with Portugal and Ireland also receiving bailouts.
On Sunday, Europe’s central bank said it will implement a bond-buying programme to calm investor concerns that Italy and Spain won’t be able to pay their debts. (AP)
A stock broker looks on in front of the main screen at the stock exchange in Madrid on 8 August. (Paul White / AP Photo)
Italian stocks back in the red in choppy trading
Italian stocks fell back into negative territory on Monday after shooting up four percent in early trading following assurances from the European Central Bank that it would intervene to boost eurozone bond markets.
The benchmark FTSE Mib index in Milan was down 0.59% at 0920 GMT.
The index had opened down 0.09% but had quickly recovered also after Prime Minister Silvio Berlusconi promised at a hastily arranged news conference on Friday to accelerate planned budget deficit cuts in a bid to calm investors.
Bank shares were generally trading up with Banca Popolare di Milano rising 3.93%, Banco Popolare gaining 3.50% and UniCredit up 3.48%.
But the index was weighed down by industry, with shares in truck maker Fiat Industrial dropping 4.51% and tyre giant Pirelli down 4.02%. (AFP)
US dollar hits new low against Swiss franc
The US dollar has hit a record low against the Swiss franc of 0.7485 centimes to the dollar — a drop of almost 30% from a year ago.
The slump Monday came on the first day of European trading following the US government debt downgrade last week. The Swiss government was holding an emergency meeting Monday to discuss the current turmoil on the financial markets and how to deal with the increasingly valuable franc that is hurting Swiss exporters.
Shares in Swiss watchmaker Swatch Group were the worst performers among the 20-strong SMI bluechip index on the Zurich exchange.
Swatch shares were down 2.5% at 353.50 francs ($465.74), while shares of Swiss banks pushed the SMI as a whole into positive territory in morning trading. (AP)
Frankfurt stocks slip further
The Frankfurt DAX index of leading shares plummeted 2.56% to 6,076.80 points in late morning trade Monday in the fallout from a US ratings downgrade and the eurozone debt crisis.
The DAX opened with a loss of 1.05% then rebounded close to positive territory before sinking again as trade progressed.
Asian markets closed with substantial losses following a global battering last week as concern grew that with an unprecedented US credit ratings downgrade, economies could slip back into recession. (AFP)
Hong Kong shares fall on US downgrade
Hong Kong stocks fell 2.17% on Monday as dealers were spooked by the downgrade of the United States’ credit rating at the end of last week.
The benchmark Hang Seng Index shed 455.57 points to 20,490.57.14 on turnover of HK$99.60 billion ($12.75 billion). (AFP)
US borrowing rates ease lightly despite credit downgrade
The US government bonds firmed slightly and borrowing rates eased on the sovereign debt market in Europe on Monday despite a decision by Standard & Poor’s to downgrade the US’ top “AAA” rating on Friday.
The yield, or borrowing rate, on US 10-year US bonds eased to 2.533% from 2.558% on Friday and the yield on 30-year bonds fell to 3.820% from 3.846%.
Short-term yields were steady at 0%. (AFP)
A broker reacts at the stock market in Frankfurt, Germany, on 8 August, as the stock index fell slightly after the opening of trading. Michael Probst / AP photo
Chinese shares close down 3.79%
Chinese shares closed down 3.79% on Monday amid investor worries about the downgrading of the US credit rating, dealers said.
The Shanghai Composite Index ended down 99.60 points at 2,526.82 on turnover of 117.6 billion yuan ($18.3 billion) -- its lowest closing level since July 19, 2010. (AFP)
World stocks mixed after G7, ECB action
Global stocks were mixed on Monday with European markets firming after the ECB signalled strong support for eurozone debt and on G-7 pledges to bolster the economy, but Asian shares fell and gold surged.
Concerns about weakening growth saw ‘safe haven’ investment gold shoot to a record high point above $1,700 an ounce. The euro rose against the dollar after Standard and Poor’s had on Friday downgraded its rating on US debt.
“With Asian markets continuing to fall overnight, it looks like we are in for another volatile week,” said Dermot O’Leary, economist at Goodbody Stockbrokers in Dublin.
“Leaders have come out with strong statements that they will do what is needed, but markets will be looking for real action.”
London’s benchmark stocks index rose 0.56% in early deals, Paris jumped 0.75% while Frankfurt was flat, reversing initial falls and a slump for equities last week. (AFP)
Italian stocks shoot up 4% after opening lower
Italian stocks shot up four percent in early trades on Monday after opening down 0.09%, following assurances from the European Central Bank that it would intervene to boost crisis-hit eurozone bond markets.
The benchmark FTSE Mib index in Milan rose 4.08% at 0735 GMT with other European markets also holding up well after heavy losses in Asian trade earlier.
Banks led the rally with Banco Popolare up 8.39%, Intesa Sanpaolo gaining 7.70% and UniCredit rising 6.96%. (AFP)
Madrid stocks jump 3.31%, bonds ahead on ECB move
Madrid stock prices surged 3.31% in early trade Monday, led by bank shares, after the European Central Bank signalled it would buy hard-hit Spanish and Italian bonds.
The IBEX-35 index of leading shares leapt 3.31% to 8,958.5 points in the first 25 minutes of trade.
Banking shares, which faced the risk of financing strains as government bond yields climbed, led the market higher. Top bank Santander’s shares shot up 6.05% to €6.834 and BBVA jumped 5.69% to €6.859.
Traders reacted with relief to an ECB statement that it would “actively implement” its bond buying programme, taken as a clear sign that it will buy Spanish and Italian bonds on the markets.
The impact was immediate. (AFP)
A worker cleans the steps at the stock market in Frankfurt, Germany, on 8 August. (Michael Probst / AP photo
Italian, Spanish bonds ease sharply after ECB move
The pressure on Italian and Spanish government debt eased sharply Monday after the European Central Bank said it was ready to buy eurozone bonds following the turmoil on the markets last week.
The ECB said it would “actively” renew eurozone bond purchases after Italy and Spain announced fresh measures and reforms to bolster their economies and tackle debt problems which had pushed their borrowing costs to record highs.
At around 0715 GMT, the yield or the rate of return earned by investors on the Italian 10-year government bond was 5.417 percent, down sharply from 6.189 percent at the close Friday.
The Spanish 10-year bond was at 5.285 percent after 6.271 percent, with both doing even better than in opening trade. (AFP)
G-20 ready to act together to stabilise markets
Members of the Group of 20 leading industrialised and developing nations said Monday they are ready to act together to stabilise financial markets and protect growth.
The joint statement was released by South Korea after further sharp falls on Asian bourses following the unprecedented US credit rating downgrade by Standard and Poors.
Monday’s falls followed a huge sell-off Friday caused by mounting problems in the eurozone, amid growing expectations that Italy and Spain could need a bailout.
The G-20 finance ministers and central bank governors affirmed a commitment to “take all necessary initiatives in a coordinated way to support financial stability and to foster stronger economic growth in a spirit of cooperation and confidence”. (AFP)
ECB ready to buy Spanish, Italian debt: France
The European Central Bank is ready to buy Spanish and Italian government debt to try and stem the eurozone crisis, french finance minister Francois Baroin said Monday.
The ECB said Monday it was ready to buy eurozone bonds following market turmoil last week but did not explicitly say it would buy Italian and Spanish bonds to ease pressure on the third- and fourth-biggest eurozone economies.
Budgetary measures announced at the weekend by Spain and Italy “have enabled the ECB to consider that, given that they are moving in the right direction, it was legitimate to help them,” Baroin told Europe 1 radio.
“The ECB ... has without ambiguity announced its intervention to buy Italian and Spanish debt if it should happen that investors withdraw,” he said.
“We have a duty, an obligation, a requirement to return to an acceptable deficit level,” Baroin added. (AFP)
French stocks edge up 0.15% after ECB pledge
French share prices edged up in early trade on Monday, gaining 0.15%, after the European Central Bank said that it would support the market for bonds issued by distressed eurozone countries.
The CAC 40 index of leading shares advanced 4.77 points to 3,283.33 points, in the face of deep uncertainty about the eurozone debt crisis and sentiment after Standard & Poor’s downgraded its rating for US debt from triple “A”. (AFP)
Swiss government meets on strong franc
The Swiss government is to meet Monday to discuss the impact of the strong Swiss franc on the economy, Swiss President Micheline Calmy-Rey said.
The government can offset some of the impact of the strong franc, for example by supporting efforts to develop new markets in Russia and China, or through research, she told Swiss television.
She acknowledged nevertheless that these are means that “act in a slower fashion” than those taken by the Swiss National Bank to slow the currency’s gains. (AFP)
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First Published: Mon, Aug 08 2011. 11 30 PM IST
More Topics: US debt rating | Markets | US | Debt crisis | Shares |