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Friday 29th of August 2008
February 28, 2007

US markets higher as Asia, Europe decline again

by Elaine Frei

US markets higher as Asia, Europe decline again

Most global equities markets were down again on Wednesday after Tuesday’s across-the-board losses, but the US markets seemed to be poised to make gains on the day after US Federal Reserve chairman Ben Bernanke said that he did not see any change in his earlier prediction of moderate growth in the US economy this year based on Tuesday’s declines. Meanwhile, Chinese regulators moved to deny rumors that it would impose a 20 percent capital gains tax on stock investments. Those rumors were thought to be one of the main factors in Tuesdays stock market declines around the world.

In Tokyo, the markets sustained substantial losses, with the Nikkei 225 2.84 percent lower to 17,604, a loss of 515 points. The Topix index dropped 58.59 points, or 3.23 percent, to 1,752.74. At one point in the session every stock listed on the Nikkei was in negative territory, but a few managed to reach gains by the end of the session. Meanwhile, trade on the Topix was suspended for 15 minutes early in the day when the index dropped 70 points in a short time. Elsewhere in Asia, the Hang Seng index in Hong Kong dropped 2.46 percent to 19,651.51, while in Singapore the STI fell 3.72 percent to 3,111.94.

In Europe, the FTSE Eurofirst 300 fell 1.4 percent to 1,485.6. Elsewhere, the Xetra Dax dropped 1.53 percent, or 104.21 points, to close at 6,715.44. That loss was only about half of the 207.9 points the Frankfurt index lost on Tuesday. In Paris, the CAC 40 was 1.29 percent lower to 5,516.32, a loss of 73.07 points. In Moscow the RTS dropped 112.63 points to close at 1,858.14.

London markets were lower as well, with the FTSE 100 1.8 percent lower to 6,171.6 and the FTSE 250 down 0.88 percent to 11,082.90. The 100 dropped 114.6 points on the session, while the 250 fell by 98 points. Miners and banks bore the brunt of the declines.

Things looked a little better on Wall Street where, by midday, the Dow Jones Industrial Average had added 0.3 percent to 12,257.74, while the Nasdaq Composite was 0.2 percent higher to 2,413.64 and the S&P 500 was up 0.3 percent to 1,405.75. The telecommunications sector was up, while homebuilders were driven lower by the news that new home sales dropped more steeply than they have in 13 years.

Crude oil prices were lower after new US inventories figures showed that crude stockpiles added 1.4 million barrels last week, while gasoline and distillates inventories were lower. The drop in distillates was a million barrels more than had been expected, while gasoline stockpiles were down about as much as had been anticipated. Precious and base metals prices were also lower.

On the currency markets, the yen and the Swiss franc both weakened after yesterday’s advances, while the US dollar was up slightly versus the euro. Sterling was a bit weaker against the greenback but gained 0.2 percent on the euro after UK house prices rose in February even though consumer confidence there was down.

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