Saturday, 6 February 2010

Global stock market shakeout spreads to Asia

Global stock market shakeout spreads to Asia
Asian stocks tumbled on Friday after Wall Street dropped overnight on worries the global recovery is weaker than many expected.

Major markets from Tokyo to Hong Kong to Sydney dropped about 3pc or more after US stocks fell on bad news about American unemployment levels and European debt.

Oil prices slipped to near $73 a barrel, adding to a big slide overnight, while the dollar continued to gain against the euro, which was at its lowest since May.

Japan's benchmark Nikkei 225 lost 2.8pc, or 293.33 points, to 10,062.65 and China's Shanghai Composite Index fell 1.6pc, or 50.85, to 2,945.13. Hong Kong's Hang Seng was down 3.2pc at 19,701.33.

In the US on Thursday, the Dow Jones industrial average closed down 268.37, or 2.6pc, at 10,002.18 after briefly trading below 10,000 for the first time in three months. That came after the Labor Department said claims for unemployment benefits rose by 8,000 to 480,000 last week, disappointing investors who hoped for a decrease.

The slide began in Europe, where markets were dragged down by concern about high debt levels in Greece, Spain and Portugal. It is becoming harder for countries to contain rising debts and to borrow money to spend their way out of recession. Spain's IBEX tumbled 5.9pc, London's FTSE 100 2.2pc, Germany's CAC 2.5pc, and France's CAC 2.7pc.

Elsewhere in Asia, South Korea's Kospi was off 3pc at 1,568.33 and Taiwan's Taiex dived 3.3pc. Sydney's S&P-ASX 200 slid 2.8pc.

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