| Global markets slide hit the U.S. data, the Euro Crisis |
 |
 |
 |
| Friday, 21 May 2010 09:19 | |||||||
Page 1 of 2 LONDON
- Global stock markets slumped on Thursday, hit by unexpected shocks in
the new U.S. jobless claims, when it was under heavy pressure from
concerns about the debt crisis of Europe.
Dealers said selling fast-paced action after U.S. data showed the number of new claims for unemployment benefits rose a sharp 5.6 percent, rising for the first time in five weeks, thwart the moderate estimates for the fall. Wall Street fell nearly three percent on that data, helping push the European market with the same amount after they started the day with a technical leap into positive territory. "The market is full of uncertainty and fear of chaos right now and is therefore not surprising that investors fled from risky assets everywhere," said Joshua Raymond of City Index in London. After climbing the roller-coaster ride amid fears the damage there might be defaults (failure) of debt in Europe, Germany on Wednesday rocked the European partners and surprising investors with a ban on some speculative trading practices. Action - a ban on "snaked short selling of government bonds and certain financial shares - meant to stop the declining trend by pressing the speculative trading, but it backfired badly, jolted the market became nervous. German Chancellor Angela Merkel's call, Thursday, to tighten the financial markets and fiscal reforms piling on the agony of Europe as investors fear the tightening of the screws will only sell them at lower prices after the growth rate of anemia. Dealers said early trade was dominated by concerns that the German unilateral actions betray a deep division of Europe at the time of unity at a premium. "The ban on short selling of Germany has emphasized that Europe is not unified and is located at the point when absolutely necessary," said analyst with Credit Agricole CIB, David Keeble. Altium Securities analyst Ian Williams said "Merkel, if anything, intensify the rhetoric he even its eurozone partners still not impressed with the German unilateral action. "Lack of coordination across partners in the single currency zone is damaging investor confidence," Williams said. On Wall Street, blue-chip Dow Jones Industrial Average fell 2.11 percent or more than 220 points at about 1600 GMT while the technology-heavy Nasdaq composite index fell 2.67 percent. New U.S. jobless claims data hits sentiment is bad because unemployment is a key issue for U.S. economic recovery. "This level of initial claims did not indicate a healthy labor market," said analyst Patrick O'Hare from Briefing.com. In London, the benchmark FTSE 100 index of leading shares slumped 1.65 percent to 5073.13 points but rose from a low of 5000.76 points. In Paris, the CAC 40 lost 2.25 percent to 3432.52 points and in Frankfurt the DAX lost 2.02 percent to 5867.88 points. Other European markets also suffered big losses. Meanwhile, the euro pulled back up better than expected, getting some support from speculation of a possible market intervention by the Federal Reserve, European Central Bank (ECB) and Bank of England (BoE). Single currency fell to 1.2368 dollars in late London trade, down from 1.2408 dollars in New York on Wednesday, when it reached 1.2144 dollars - its lowest level since mid-April 2006 - amid fears of eurozone crisis. While the euro tumbled close to nine-year high against the yen lower. Eurozone finance head Jean-Claude Juncker, said Thursday he does not see the need for European policy makers to act immediately to shore up falling euro recently, blaming the markets "irrational" for the fall. "I'm really worried about the speed (rate) from the falling exchange rate," he said, adding: "I do not think that this is a problem (the need) for immediate action." Analyst Dermot O `Leary, at Goodbody stockbrokers in Dublin, said that investors remain unconvinced that the crisis of the euro zone is being handled properly. "While the euro has strengthened a bit ... still relatively close to the lowest four-year high against the dollar, so that some work still needed to convince the market that the situation under control," he said. In Asian trade earlier Thursday, Tokyo lost 1.54 percent to its lowest level in more than three months, Hong Kong down 0.17 percent while Sydney lost 1.61 percent to its lowest level since August 21, 2009. | Antaranews | tenderoffer.biz |
|
Legitimacy & Law
About Us
Trusted Partner
