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Title: World markets plunge on U.S. fears
Source:
cnn.com
URL Source: http://edition.cnn.com/2008/BUSINESS/01/21/markets.plunge/index.html
Published: Jan 21, 2008
Author: cnn
Post Date: 2008-01-21 12:07:57 by Pinguinite
Keywords: None
Views: 112
Comments: 4
LONDON, England (CNN) -- Stock markets around the world plummeted Monday, prompted by pessimism about U.S. President George W. Bush's plans to boost the U.S. economy. Tokyo investors are worried about how a possible U.S. recession could hurt exporters' profits. India's Sensex stock index fell nearly 11 percent -- its second biggest percentage drop ever -- before recovering to 7.4 percent, while Hong Kong's Hang Seng index suffered its largest percentage drop since the terrorist attacks of September 11, 2001 when it fell 5.5 percent to 23,818.86 points. In Japan, the benchmark Nikkei 225 index closed on 13,325.954 points, a slide of 3.9 percent and its biggest dip in two years. Shanghai's Composite index fell 5.1 percent. Markets in Europe reacted with London's FTSE 100 Index down 4.02 percent at 15.30 GMT, the CAC-40 in Paris down 5.33 percent and Frankfurt's DAX dropping 6.02 percent. Video Watch report on stock market chaos. » The U.S. markets are closed Monday for Martin Luther King Day but stocks in Mexico tumbled by 4.77 percent on opening while Argentina and Brazil's fell by 4.64 percent and 6 percent respectively. The Toronto Stock Exchange also opened more than four percent down, falling by 543.13 points to 12,193.13 and taking around US $68 billion off the market's value. A drop of 6.6 percent last week wiped out gains made by the market last year. On Friday U.S. President George W. Bush announced an economic stimulus plan involving a $145 billion tax relief package. But investors remain skeptical that the plan will encourage consumer spending, said CNN's Eunice Yoon. Don't Miss * Bush calls for quick, temporary tax relief to spur economy * Asian economies seen less reliant on U.S. * Stocks rally after Asian plunge "What people are wondering here is will those tax breaks actually address some of the main issues - not only the weakness in the financial sector or the weakness in the housing market but will they actually get people spending again," she said. She added: "People out here in Asia rely very heavily on the consumer in the United States and that's one of the reasons why Toyota, which has about 54 percent of its business in the United States, saw its share price tank this morning." Today's fall will renew speculation that the crisis in the U.S. housing market may trigger a global recession. advertisement "There's a big fear people are so gripped by debt now they won't spend but will pay down their debt, and if that happens that doesn't mean more manufacturing, it doesn't mean more employment, it doesn't help the economy," said CNN's Todd Benjamin. "People feel at large that what the Bush administration is proposing is too little, too late," he added
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#1. To: Pinguinite (#0)
Could very well be an ugly day on Wall Street tomorrow, however I've seen WS do exactly the opposite than what is expected. If there really is a 'plunge protection team', they are rightly busy today trying to set up positive markets in the morning.
Never swear "allegiance" to anything other than the 'right to change your mind'!
www.ronpaulwarroom.com/?p=2426 China is selling off! Red Alert Stock Market could Crash Soon! By ancientkemet08 | January 21, 2008 BEIJING — Shares in China’s banks fell sharply Monday after news reports said its No. 2 lender, Bank of China, might write down holdings of U.S. mortgage securities and two others increased reserves for possible losses. The reports were the first indication that Chinese lenders, which have so far avoided damage from the U.S. credit crisis, might face problems due to their holdings of subprime securities. Also Monday, China’s banking regulator warned that lenders might face risks from fluctuations in fast- rising real estate prices. Bank of China is expected to announce a “significant writedown” on its $7.95 billion in U.S. subprime mortgage securities, Hong Kong’s South China Morning Post newspaper reported, citing unidentified sources. Bank of China spokesman Wang Jianping declined to comment. He said the bank would release details of its assets in late March when it announces annual earnings. Bank of China shares fell 4.1% in Shanghai market and by 6.4% in Hong Kong. China’s biggest banks are listed in both cities, with shares in Shanghai off-limits to most foreign investors, while Hong Kong is open to global traders. The fall in bank stocks helped to drive overall market declines in both cities, with Shanghai’s main index sinking 5.1% and Hong Kong plunging 5.5% — its biggest percentage drop since 2001. “The subprime woes in the U.S. have raised concerns at home about risks in the domestic mortgage market and prompted selling in banking and real estate companies,” said Wang Junqing, an analyst at Guosen Securities in Shanghai. Bank of China, China’s biggest owner of subprime mortgage securities, said in October they were 3.05% of its total holdings. The bank said it had set aside $473 million for potential writedowns. Bank of China reported profits of 15.9 billion yuan ($2.12 billion) for the July-September quarter, up 23% from the same period of 2006. It says it has more than 5.8 trillion yuan ($775 billion) in assets. Two other major lenders, Industrial & Commercial Bank of China and China Construction Bank, are increasing reserves for possible writedowns on subprime mortgage holdings, the respected Chinese business magazine Caijing reported. ICBC, China’s biggest commercial lender, raised reserves to cover 30% of its subprime holdings, while Construction Bank’s reserves covered 40% of its holdings, the magazine said, without citing sources. The two banks’ subprime holdings are much smaller than those of Bank of China, at about $1 billion each, and writedowns should not affect their profits, the magazine said. Phone calls on Monday to the press and investor relations offices at both ICBC and Construction Bank were not answered. ICBC shares fell by 7.8% in Hong Kong and 3.8% in Shanghai, while Construction Bank was down 6.4% in Shanghai and 4.1% in Hong Kong. China’s banks have seen revenues and profits soar in recent years, driven by a fast-growing economy and rising real estate prices. But the country’s industry regulator warned in a report released Monday that they might face higher risks from fluctuating real estate prices and financial conditions. “Property market price fluctuation possibly could increase credit risks facing the banking industry,” said Jiang Dingzhi, vice chairman of the China Banking Regulatory Commission, said in a report on the agency’s Web site. Jiang gave no details but called on banks to improve risk management. Chinese regulators have raised interest rates repeatedly over the past year and tightened lending standards in an effort to cool a boom in investment in real estate and other assets. They have warned repeatedly that runaway spending could lead to a debt crisis if investors in ill-conceived plans default on loans.
Black Monday as biggest FTSE crash since 9/11 wipes off nearly £60bn in shares
China is selling off! Red Alert Stock Market could Crash Soon!
#2. To: Pinguinite, FOH, Original_Intent (#0)
#3. To: Pinguinite (#0)
#4. To: Pinguinite (#0)
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