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Asian, European markets fall PDF Print E-mail
Thursday, 10 July 2008

AP, LONDON -- European and most Asian stock markets fell Tuesday, hit with renewed fears over U.S. credit problems and their impact on financial companies after weakness in the previous session on Wall Street.

Britain's FTSE 100 share index fell more than 2 percent, with every blue-chip stock on the list starting the day in negative territory, before climbing back up to 5,450.50 by afternoon in Europe, still down 1.13 percent from Monday's close.
 
Elsewhere in Europe, Germany's DAX fell 1.60 percent to 6,293.33 and France's CAC dropped 1.84 percent to 4,262.88.
 
In Asia, Japanese shares dropped to their lowest level in nearly three months. Hong Kong, Taiwan, India and South Korea stocks also declined, while mainland China's markets climbed.
 
Investors were jittery despite lower oil prices after shares of U.S. mortgage purchasers Fannie Mae and Freddie Mac tumbled Monday in New York following a Federal Reserve official's warning that housing market problems would likely extend into next year. The two institutions were also pulled lower after Lehman Brothers analysts said accounting changes could leave them short of capital reserves.
 
In the UK, concern about continued weakness in the British economy helped push the FTSE briefly into bear territory.
 
Persimmon PLC, the nation's No. 2 homebuilder, announced that it was laying off 1,100 employees to cope with a sharp drop in the housing market which had cut its sales in the first half by about a third.
 
Shortly after opening, the index was more than 20 percent down from its 52-week of high of 6,754.10, and 22 percent below its all-time high of 6,930.2 from Dec. 30, 1999. A fall of 20 percent is a common definition of a bear market.
 
In Japan, the benchmark Nikkei 225 Stock Average slid 2.5 percent, to 13,033.10 -- its lowest close since April 16. Securities, mining, banking and consumer finance issues all suffered.
 
Sumitomo Mitsui Financial Group, Inc. and Resona Holdings, Inc. both plunged 4.1 percent. Nomura Holdings Inc., Japan's biggest broker, retreated 4.6 percent.
 
Japanese exporters succumbed to a weakening dollar, which traded at 106.34 yen late afternoon Tuesday, down from 107.14 yen Monday in New York. A stronger yen reduces the value of sales repatriated from abroad.
 
Toyota Motor Corp. dropped 1.2 percent and Sony was off 4.1 percent.
 
In Hong Kong, the blue-chip Hang Seng Index lost 3.2 percent to close at 21,220.81 as traders reacted to the U.S. market's performance and regional declines. Aluminum Corp. of China, also known as Chalco, shed 5.6 amid reports that it may see lower output at two mainland plants.
 
Oil companies were off. China Petroleum & Chemical Corp., or Sinopec, fell 2.7 percent despite lower crude prices, which help the refiner's margins. Upstream oil producer CNOOC lost 3.4 percent.
 
In other markets, Taiwan's main stock benchmark plummeted nearly 4 percent, weighed down by losses in the financial sector. In India, the main Sensex index fell 1.3 percent.
 
Bucking the trend, China's shares rose for a second day, with news that the government was postponing a resource tax, lifting coal producers. Hopes for an Olympics-led tourism boost pushed up airline stocks. The benchmark Shanghai Composite Index rose 0.8 percent to 2,814.95 points.
 
Shares in midsize producer Anhui Hengyang Coal Ltd. rose by the full daily limit of 10 percent. China Shenhua Energy Corp., China's biggest coal producer, rose 3 percent.
 
Airlines also were higher, adding to recent gains on investor expectations of strong tourism growth for August's Beijing Olympics. Air China Ltd., the country's No. 2 carrier by passenger numbers, rose 6.8 percent. Industry leader China Southern Airlines Corp. rose 2.2 percent.
 
The main Shanghai index has gained 6.1 percent since hitting a 16-month low of 2,651.6 on July 1. But it is still off 54 percent from its all-time high of 6,092.06 points on Oct. 16.

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