World Markets Plunge; AIG Loss, HSBC Offering

123jump.com Staff
02 Mar, 2009
New York City

World markets dropped as earnings worries, deepening economic crisis and as some of the largest banks and industrial companies fell sharply in New York. Markets in U.S., UK, Switzerland, Brazil and Argentina dropped more than 4%.

[R]5:00PM New York – 11:00PM Frankfurt, 4:00AM Sydney – World markets dropped as earnings worries, deepening economic crisis and as some of the largest banks and industrial companies fell sharply in New York. Markets in U.S., UK, Switzerland, Brazil and Argentina dropped more than 4%.[/R]

U.S. stocks plunged as negative sentiment on corporate earnings, banking system and global economic weakness gathered storm. HSBC plan to launch the largest British fund raising at 51% discount to the latest closing price and AIG reported record loss of $61.7 billion in the latest quarter and

Stocks in Hong Kong fell sharply after HSBC reported a larger than expected loss and proposed to raise 12.5 billion pounds at 51% discount to the latest closing price.

American Capital Ltd led the decliners in the S&P 500 index with a loss of 16.2%. American International Group, Inc posts $61.7 billion in fourth quarter loss. Atlas America, Inc posts loss in fourth quarter. Clear Channel Outdoor Holdings, Inc reports $3 billion loss in fourth quarter.

London market averages fell 5% after HSBC announced the largest rights issue of £12.5 billion for a British company. HSBC offered 51% discount to shareholders on record. Manufacturing index fell to a record low in February also unnerved investors.

Japan stock indexes dropped after wages dropped in January on worsening conditions on the global financial markets. Domestic sales of new cars excluding mini-vehicles fell 32.4% to 218,212 units in February as sales from Toyota and Honda plunged 32% and 21% respectively.

Australian wages and salaries increase 0.2% in the December quarter and new home sales advance 8% in January. Australian manufacturing index drops in February. Stocks in Australia fell on a weakness in metal prices and worries that industrial activities will slowdown in the rest of the year.

Exports from India decline 15.9% to $12.38 billion in January and trade deficit in the month persisted at elevated level in the month. For the ten months deficit surged 50% despite a fall in oil prices. Sensex Index dropped 3.2%. National elections are announced to begin on April 16.

American Markets Reviews

Dow Jones Industrial Average decreased 299.64 or 4.2% to a close of 6,763.29, S&P 500 Index declined 34.27 or 4.6% to 700.82, and Nasdaq Composite Index edged lower 54.99 or 4% to a close of 1,322.85. In Toronto TSX Composite declined 435.51 or 5.4% to close at 7,687.51.

In Latin American trading, Mexico Bolsa Index decreased 822.38 or 4.6% to 16,929.80 and Brazil Bovespa Stock Index dropped 5.1% or 1,948.62 to 36,234.69.

Argentina dropped 7.4%, Chile decreased 2.4%, Peru declined 2.3% and Colombia fell 2.5%.

U.S. Stock Movers

Of the stocks in S&P 500 index, 7 increased, 492 declined and one was unchanged.

Textron Inc led the decliners in the S&P 500 index with a loss of 21.6% followed by losses in Developers Diversified of 20.7%, in Citigroup Inc of 20.0%, in Leucadia National of 18.9%, in Pactiv Corp of 18.5%.

Regions Financial led gainers in the S&P 500 index with a rise of 4.4% followed by gains in Becton Dickinson of 2.9%, in Rohm & Haas of 1.50%, in Family Dollar Stores of 0.9% and in Baxter International of 0.5%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 288.27 or 3.81% to 7,280.15, Hang Seng index in Hong Kong decreased 494.11 or 3.86% closed to 12,317.46, CSI 300 index in China higher 24.18 or 1.13% closed to 2,164.67. ASX 200 index in Australia decreased 94.40 or 2.82% closed to 3,250.10. The KL Composite index in Malaysia lower 14.11 or 1.58% closed to 876.56.

The Kospi Index in South Korea decreased 44.22 or 4.16% to close at 1,018.81. SET index in Thailand closed lower 15.00 or 3.48% to 416.52 and JSE Index in Indonesia decreased 29.37 or 2.28% closed to 1,256.11. The Sensex index in India decreased 284.53 or 3.20% closed to 8,607.08.

Europe Markets Review

In London FTSE 100 Index closed lower 204.26 or 5.33% to 3,625.83, in Paris CAC 40 Index decreased 121.02 or 4.48% to close at 2,581.46 and in Frankfurt DAX index lower 133.67 or 3.48% to close at 3,710.07. In Zurich trading SMI decreased 252.40 or 5.38% to close at 4,438.27.

Commodities, Bonds and Currencies

Yields on 10-year bond decreased to 2.87% and on 30-year bonds decreased to 3.61%.

The U.S. dollar edged higher to $1.2528 to a euro and against the Japanese yen inched higher to 97.38 yen.

Immediate futures prices of Texas crude oil increased $4.72 to $40.04 a barrel, for natural gas decreased $0.05 cent to $4.15 per mbtu and gasoline prices decreased 9.25 cents to 128.00 cents a gallon.

Futures of corn decreased 8.75 cent to $3.5025, soybean decreased 28.00 cents to $8.440, sugar gained to 0.98 a pound to 12.75 and wheat decreased 15.50 cents to $5.06 a bushel.

In metals trading, copper prices decreased 1.70 cents to $1.52 a pound, gold decreased $15.50 to $927.00 per ounce and silver decreased 0.14 cent to $12.95.