World Markets Decline; Gold Above $1,000

123jump.com Staff
20 Feb, 2009
New York City

World stocks are on the decline as prices of metals and corporate earnings declined. Gold price crossed $1,000 an ounce and market indexes in Europe drop to five-year lows. Stocks in Japan drop to 24-year lows. Corporate earnings remain weak and investor confidence in Europe and U.S. is at its low.

[R]10:00AM New York – World stocks dropped as global economic worries and weak earnings rise to the top of the investors concerns.[/R]

Stocks around the world dropped as investors voice their skepticism of the recent economic stimulus package in the U.S., worry about the health of Eastern European economies and banks and weak demand in Japan. Stocks in Japan dropped to 24-year lows and gold jumped above $1,000 an ounce. European market indexes hover near five-year lows and markets in India and China are trading below 60% of their peaks.

The consumer price index in January rose 0.3% from a declined of 0.8% in December according to the latest data from the U.S. department of labor. The core rate of inflation that excludes food and energy prices rose 0.2%, at the upper end of the rage targeted by the Fed.

Rents and food prices which account for 40% and 20% of the index respectively rose 0.3% and 0.1% respectively.

The price index was unchanged from a year ago and core rate of inflation rose 1.7% in the period. The measured inflation is subdued as energy price has declined in the recent months but large economic stimulus and reckless government spending is likely to rekindle inflation in 2010 and after.

The Swedish auto maker Saab, the persistent loss maker in the last two decades sought protection from creditors after the parent General Motors put the Swedish auto unit on sale. The Swedish government earlier declined to support the loss making automaker citing its poor performance.

Saint-Gobain SA and Lafarge SA will raise 1.5 billion euros to shore up capital base. Lafarge will also cut costs of 200 million euros in 2009.

Swiss Reinsurance Co, the world’s second-biggest reinsurer said fourth quarter net loss was Sfr 1.75 billion compared to net profit of Sfr 170 million, a year earlier.

Swiss Reinsurance Co, in the last one year traded as high as Sfr 92.85 in April 2008 and as low as Sfr 0.82 in February 2009. Based on the yesterday’s closing price of Sfr 14.00 the company has market cap of Sfr 4.94 billion.

Swiss Life Holding, a Swiss provider of life insurance and pension solutions said full-year net profit fell Sfr 340 million compared to net profit of Sfr 1.37 billion, a year earlier.

Aeroports de Paris SA, Airport developer said fourth quarter revenues rose 7.5% to €641.8 million from €596.9 million a year earlier.

Aeroports de Paris SA, in the last one year traded as high as €84.60 in March 2008 and as low as €38.44 in February 2009. Based on the yesterday’s closing price was €39.53 the company has market cap of €3.91 billion.

Club Mediterranee SA, Europe’s largest resort company said first quarter sales increased 1.9% to €329 million from €323 million a year earlier.

Club Mediterranee SA, in the last one year traded as high as €37.70 in May 2008 and as low as €10.20 in January 2009. Based on the yesterday’s closing price was €11.70 the company has market cap of €223.51 million.

Lafarge S.A, the world’s biggest cement producer said fourth quarter sales climbed 7% to €4.65 billion. Net profit in the quarter dropped 89.3% to €40 million compared to net profit of €375 million, a year earlier.

Lafarge S.A, in the last one year traded as high as €123.80 in May 2008 and as low as €32.13 in November 2008. Based on the yesterday’s closing price was €36.82 the company has market cap of €7.16 billion.

Schneider Electric SA, French electrical components group said full-year sales climbed 5.8% to €18.3 billion. Net profit in the full-year rose 6.3% to €1.7 billion.

Schneider Electric SA, in the last one year traded as high as €86.31 in April 2008 and as low as €39.01 in October 2008. Based on the yesterday’s closing price was €54.50 the company has market cap of €13.15 billion.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 141.27 or 1.87% to 7,416.38, Hang Seng index in Hong Kong decreased 324.19 or 2.49% closed to 12,699.17, CSI 300 index in China higher 45.91 or 2.00% closed to 2,344.32. ASX 200 index in Australia decreased 46.50 or 1.35% closed to 3,402.40. The KL Composite index in Malaysia lower 9.88 or 1.10% closed to 889.71.

The Kospi Index in South Korea decreased 41.15 or 3.72% to close at 1,065.95. SET index in Thailand closed lower 6.95 or 1.57% to 434.67 and JSE Index in Indonesia decreased 26.75 or 2.02% closed to 1,296.94. The Sensex index in India decreased 199.42 or 2.21% closed to 8,843.21.

Europe Markets Review

In London FTSE 100 Index traded lower 104.46 or 2.60% to 3,913.91, in Paris CAC 40 Index decreased 86.14 or 3.00% to 2,786.46 and in Frankfurt DAX index traded lower 134.70 or 3.20% to 4,080.51. In Zurich trading SMI decreased 137.87 or 2.76% to 4,852.65.