Dexia Rescue, Euro Falls

123jump.com Staff
30 Sep, 2008
New York City

U.S. Stocks recover at mid-day trading on the hopes that the Congress will pass a revised bailout plan. European markets closed higher. Dexia SA, the Belgian bank will receive an emergency financing of 6.6 billion euros after Fortis needed 11.2 billion from the government.

[R]12:00PM New York – U.S. markets rebound on the hopes that bailout package will be approved. U.S. subprime credit losses force Dexia SA to seek Belgium government rescue.[/R]

U.S. markets traded higher at mid-day trading on the optimism that the U.S. Congress will review the unpopular bailout plan again pass before the end of the this week. The Senate is expected to vote on the proposal on Wednesday. The proposal was rejected by the U.S. House after lawmakers responding to voters’ frustration with what they perceive as a bailout of rich bankers on the Wall Street.

Global markets continue to look for direction to the U.S. as the banking crisis spreads to Europe. Belgium based Dexia SA sought and received 6.6 billion euros in financing from Belgium. European banks linked to the U.S. subprime markets are reeling under a wave of losses as the U.S. housing market continues to weaken. Only a day ago Fortis, the largest Belgian bank received 11.2 billion euros of emergency financing from the governments of the Netherlands, Belgium and Holland.

The dollar rose against euro after European banks seek bailout from the local governments. In the last three working days Fortis and Dexia in Belgium needed a total of 18 billion euros and mortgage lender Bradford and Bingley Plc had to be nationalized by the UK government. Euro fell to 1.40425 against euro in the morning trading in New York, a drop of 2.4% for the day.

Markets in Asia closed lower tracking losses in the U.S. Japan and Australia led the decliners in the region with a loss of more than 4%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 483.75 or 4.12% to 11,259.86, Hang Seng index in Hong Kong increased 135.53 or 0.76% closed to 18,016.21. ASX 200 index in Australia decreased 206.90 or 4.30% to close 4,600.50. The KL Composite index in Malaysia lower 1.04 or 0.10% closed to 1,018.68. Market of China was closed today.

The Kospi Index in South Korea decreased 8.30 or 0.57% to close at 1,448.06, SET index in Thailand closed lower 4.75 or 0.79% to 596.54 and JSE Index in Indonesia decreased 13.58 or 0.74% to 1,832.51. The Sensex index in India increased 264.68 or 2.10% closed to 12,860.43.

Europe Markets Review

In London FTSE 100 Index traded higher 20.00 or 0.42% to 4,838.80, in Paris CAC 40 Index increased 12.90 or 0.33% to 3,966.38 and in Frankfurt DAX index traded lower 28.77 or 0.50% to 5,778.31. In Zurich trading SMI increased 102.18 or 1.57% to 6,602.68.