Monday, January 28th, 2008
After a global stock market rally, renewed pessimism about the US economy pushed Asian stocks down. With many leading financial experts now saying a US recession seems highly likely, traders have reacted nervously. The main Shanghai index fell more than 7 percent. China will be affected by an American population less interested in importing cheap Chinese goods. Doubts about the Fed’s ability to help the US economy stay out of a recession remain. Investors are expecting another 0.25 rate cut this week.
Asian share prices were hammered Monday as a global stock market rally fizzled out amid renewed pessimism about the US economic outlook and a plunge in Chinese stocks, dealers said.
They said that investors fled to safe havens such as bonds and gold as markets around the region slumped deep into the red in the wake of losses on Wall Street, with Shanghai plunging by about 7.2 percent.
Hong Kong was down almost 6.0 percent in afternoon trade and Singapore tumbled by about 5.0 percent. Tokyo ended down nearly 4.0 percent as Seoul lost 3.85 percent. Indian share prices slid about 4.6 percent in morning deals.
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Tuesday, January 22nd, 2008
A global economic slowdown due to a possible US recession has caused fear on the World’s stock exchanges. European and Asian share indexes continued their losses on Tuesday. A $145 billion US stimulus package to assist the US economy has failed to impress investors, with many saying it’s too little too late. China’s Shanghai Composite Index closed at 7.2% lower yesterday. The main French and German indexes both lost around 7% yesterday. The US Fed is under increasing pressure to make more aggressive rate cuts.
Asian and European share indexes have continued to fall sharply on Tuesday amid fears of a recession in the US leading to a global economic slowdown.
London’s FTSE 100 index has been having a bumpy day, initially falling more than 3%, then recovering to be 1% up on the day and later trading down 0.8%.
Earlier, Asian markets had tumbled with Japan’s Nikkei index closing down 5.7%, taking its decline this year to 18%.
Many analysts are predicting indexes could fall further in coming weeks.
READ THE BBC ARTICLE HERE
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Monday, January 14th, 2008
Gold stood at almost $900 usd an ounce on Monday. Investors are looking for safer investments due to ongoing concern about the state of the US economy. Asian stocks remained at 3-week lows. Wall Street’s 2% lower close on Friday caused European stocks to open lower in early morning trading. Continuing economic problems in the US could cause more damage to Asian stocks in particular this year. The US is Asia’s biggest export market.
Wall Street dropped sharply on Friday following warnings, including from credit card issuer American Express Co, about slowing U.S. consumer spending, a bad omen for Asian exporters.
The worsening outlook for the world’s largest economy threatens to cripple what has been strong growth in Asia, with stock markets posting double-digit gains in 2007, as reflected in the one-third rise in the MSCI regional index.
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Friday, January 11th, 2008
Chairman of the US federal bank, Ben S. Bernanke, indicated that further US rate cuts are planned. The measure is meant to prevent the US economy from falling into recession. The European Central Bank has recently announced that it will keep rates at 4% despite growth worries, and increasing inflation in Europe. Investors welcomed the news from the Fed chief, and stocks rose to make up for losses in early morning trading. The US federal bank has put economic growth as its number one priority, ignoring inflation concerns for now.
Ben S. Bernanke, the chairman of the Federal Reserve, sent a strong signal on Thursday that the central bank will lower interest rates again this month as it tries to stave off a recession.
Mr. Bernanke said the downturn in the credit and housing markets posed substantial risks to economic health. He predicted that consumer spending and overall growth would slow in 2008.
“We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks,� Mr. Bernanke said in a speech in Washington on Thursday.
Calling monetary policy the “Fed’s best tool� for regulating the economy, Mr. Bernanke said that “additional policy easing may well be necessary� to maintain growth levels as consumer spending and home values face a steep decline this year.
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