Citigroup Drops 18%, World Markets Nervous

123jump.com Staff
21 Nov, 2008
New York City

U.S. stocks rebounded in the early morning after more than 10% in last two days. However, European markets fell with the weaknesses in banks and retail stocks. Asian stocks rose on the hope that the government will support the domestic programs. Citigroup fell another 18%.

[R]10:30AM New York – Worldwide stocks fell as economic worries mount. Citigroup board is likely to discuss the company future.[/R]

Stocks in New York dropped as nervous investors continue to sell stocks and seek safety of bonds. The U.S. Treasury bond yields are near historic lows. Yields on 10-years and 30-years bonds were at 3.18% and 3.63%.

Of the S&P 500 index, 378 stocks fell and 117 rose and 5 were changed. Autodesk Inc plunged 21% followed by losses of more than 5% in Centex Corp, Lennar, KB Home and Pulte Home. The Gap Inc and Sprint Nextel Company led the gainers with a rise of more 20%.

Citigroup Inc dropped another 18% or 82 cents $3.82 after the bank delays the merger various banking units in Japan. Bloomberg News reported that Citigroup board is likely to discuss the fate of the company.

European stocks were on the defensive as investors looked for higher yields in the bond markets and safety of principles. The continued uncertainties and mixed messages from the U.S. lawmakers have turned the historically stable markets in the developed nations as volatile as the emerging markets.

Most market indexes in Europe were on the decline as stocks fell in the banking, real estate and telecom sectors. In London trading 41 stocks of the FTSE 100 index were on the decline and in Frankfurt, DAX index fell 1% with 16 stocks losing. Deutsche Postbank dropped 8% in Frankfurt and Thomas Cook Group and Vodafone Group dropped more than 6%.

Asian stocks rallied on the hopes that more government intervention in the region will bolster the economic growth and sustain the domestic demand.

The Bank of Japan kept its key lending rate at 0.3% and indicated that it is ready to add more liquidity in the financial system. The separate report from the Cabinet Office also noted that Japanese economy is slowing down sharply in the last month as the economies in the US and Europe slowdown and “downward pressures” are increasing.

Toyota today announced to lower its temporary workers in Japan by half to 3,000 after it lowered worldwide sales estimate for the rest of the fiscal year few days ago.

Stocks in India surged 5.5% after plunging more than 20% in the last seven trading session. The recent plunge in market index attracted cautious bargain hunting as the government estimates 8% growth in the current fiscal year that ends in March of 2009.

State controlled Oil & Natural Gas Corporation surged 5.6% after its chief executive predicted that oil prices will rebound to $100 a barrel, twice the current level to build support for the acquisition of UK based Imperial Energy Plc.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 207.75 or 2.70% to 7,910.79, Hang Seng index in Hong Kong increased 360.64 or 2.93% closed to 12,659.20 CSI 300 index in China lower 11.69 or 0.61% closed to 1,920.74. ASX 200 index in Australia increased 63.60 or 1.90% to close 3,416.50. The KL Composite index in Malaysia higher 1.56 or 0.18% closed to 866.88.

The Kospi Index in South Korea increased 55.04 or 5.80% to close at 1,003.73. SET index in Thailand closed higher 3.66 or 0.93% to 397.51 and JSE Index in Indonesia decreased 8.69 or 0.75% to 1,146.28. The Sensex index in India increased 464.20 or 5.49% closed to 8,915.21.

Europe Markets Review

In London FTSE 100 Index traded higher 30.18 or 0.78% to 3,905.17, in Paris CAC 40 Index increased 10.46 or 0.35% to 2,990.88 and in Frankfurt DAX index traded higher 15.55 or 0.37% to 4,235.75. In Zurich trading SMI decreased 60.02 or 1.13% to 5,246.08.