World stock markets were mostly lower Monday as a U.S. pledge to rescue its troubled carmakers failed to ease deep concerns that the global slump was hurting company profits.
The plan announced Friday to extend General Motors Corp. and Chrysler LLC $17.4 billion in loans brought a measure of relief to some investors, staving off bankruptcies that would have surely deepened the recession in the world's largest economy.
But early gains in Asia soon faded amid trenchant worries about the U.S. and global outlook, as well as shrinking demand for Asian-made products like cars and electronics that keep the region's economies growing, analysts said. In Japan, new figures showed a record 26.7 percent plunge in exports last month compared to a year ago.
With demand drying up, Toyota Motor Corp. slashed its profit forecast Monday for the fiscal year to the barely break-even point. Meanwhile, tech companies saw heavy selling after Taiwan's Hon Hai Precision Industry Co., world's largest contract electronics maker, announced plans to cut jobs and its chairman suggested the worst of the downturn was yet to come.
"The big question about what's going to happen with the big U.S. automakers has been settled for now," said D. Gorton, research analyst at Louis Capital Markets in Hong Kong. "But investors are still wondering what's going to happen with the U.S. and ... when the U.S. economy is going to recover."
Trading was light and investors pocketed some profits ahead of the year-end holidays.
In Europe, key stock measures in Britain, Germany and France fell more than 1.5 percent in early trade.
Hong Kong's Hang Seng Index dropped 3.3 percent to 14,874.61. Taiwan's key stock index sank 3.4 percent, dragged lower by a 6.6 percent decline in Hon Hai shares.
In South Korea, the Kospi dipped 0.1 percent after opening higher. Singapore, Australia and mainland China benchmarks were each down over 1. 5 percent.
Tokyo bucked the downward trend, with its Nikkei 225 stock average rising 135.26 points, or 1.6 percent, to 8,723.78 despite the latest bad news about the country's exports.
Japanese investors seemed focused instead on the U.S. auto industry bailout, helping buoy Honda 5.4 percent and Nissan 2.7 percent, and the country's recent efforts - including an interest rate cut Friday - to counter the recession.
Deutsche Securities banking analyst Shin Tamura said the central bank's recent moves, while unlikely to have a major direct impact on earnings or financial markets, might help improve sentiment.
"That the government and the Bank of Japan continue to take steps to stabilize the markets and economy is likely to allay market concerns somewhat," Tamura said in a report.
In Hong Kong, heavyweight HSBC lost 2.5 percent, pressuring the broader market, after the bank's credit outlook was revised to negative by ratings agency Standard & Poor's on Friday. China Mobile, meanwhile, tumbled over 5 percent on concerns about growth in subscribers.
Last week in New York, Wall Street finished a choppy session mixed. The Dow fell 25.88, or 0.30 percent, to 8,579.11 while the Standard & Poor's 500 index rose 2.60, or 0.29 percent, to 887.88.
U.S. futures were down, suggesting Wall Street would open lower. S&P futures were down 1.7 points, or 0.2 percent, to 879.60.
Oil prices were flat. The January contract dipped 7 cents to $42.29 in Asian trade on the New York Mercantile Exchange.
In currencies, the dollar strengthened to 89.67 yen, up from 89.24 yen, and the euro rose to $1.4075 from $1.3913 late Friday.
source: http://www.thejakartapost.com/news/2008/12/22/world-stocks-mostly-lower-dour-economic-outlook.html
The plan announced Friday to extend General Motors Corp. and Chrysler LLC $17.4 billion in loans brought a measure of relief to some investors, staving off bankruptcies that would have surely deepened the recession in the world's largest economy.
But early gains in Asia soon faded amid trenchant worries about the U.S. and global outlook, as well as shrinking demand for Asian-made products like cars and electronics that keep the region's economies growing, analysts said. In Japan, new figures showed a record 26.7 percent plunge in exports last month compared to a year ago.
With demand drying up, Toyota Motor Corp. slashed its profit forecast Monday for the fiscal year to the barely break-even point. Meanwhile, tech companies saw heavy selling after Taiwan's Hon Hai Precision Industry Co., world's largest contract electronics maker, announced plans to cut jobs and its chairman suggested the worst of the downturn was yet to come.
"The big question about what's going to happen with the big U.S. automakers has been settled for now," said D. Gorton, research analyst at Louis Capital Markets in Hong Kong. "But investors are still wondering what's going to happen with the U.S. and ... when the U.S. economy is going to recover."
Trading was light and investors pocketed some profits ahead of the year-end holidays.
In Europe, key stock measures in Britain, Germany and France fell more than 1.5 percent in early trade.
Hong Kong's Hang Seng Index dropped 3.3 percent to 14,874.61. Taiwan's key stock index sank 3.4 percent, dragged lower by a 6.6 percent decline in Hon Hai shares.
In South Korea, the Kospi dipped 0.1 percent after opening higher. Singapore, Australia and mainland China benchmarks were each down over 1. 5 percent.
Tokyo bucked the downward trend, with its Nikkei 225 stock average rising 135.26 points, or 1.6 percent, to 8,723.78 despite the latest bad news about the country's exports.
Japanese investors seemed focused instead on the U.S. auto industry bailout, helping buoy Honda 5.4 percent and Nissan 2.7 percent, and the country's recent efforts - including an interest rate cut Friday - to counter the recession.
Deutsche Securities banking analyst Shin Tamura said the central bank's recent moves, while unlikely to have a major direct impact on earnings or financial markets, might help improve sentiment.
"That the government and the Bank of Japan continue to take steps to stabilize the markets and economy is likely to allay market concerns somewhat," Tamura said in a report.
In Hong Kong, heavyweight HSBC lost 2.5 percent, pressuring the broader market, after the bank's credit outlook was revised to negative by ratings agency Standard & Poor's on Friday. China Mobile, meanwhile, tumbled over 5 percent on concerns about growth in subscribers.
Last week in New York, Wall Street finished a choppy session mixed. The Dow fell 25.88, or 0.30 percent, to 8,579.11 while the Standard & Poor's 500 index rose 2.60, or 0.29 percent, to 887.88.
U.S. futures were down, suggesting Wall Street would open lower. S&P futures were down 1.7 points, or 0.2 percent, to 879.60.
Oil prices were flat. The January contract dipped 7 cents to $42.29 in Asian trade on the New York Mercantile Exchange.
In currencies, the dollar strengthened to 89.67 yen, up from 89.24 yen, and the euro rose to $1.4075 from $1.3913 late Friday.
source: http://www.thejakartapost.com/news/2008/12/22/world-stocks-mostly-lower-dour-economic-outlook.html
Comments