China Worries Drag World Markets; Gold, Oil Fall

123jump.com Staff
31 Aug, 2009
New York City

Global stocks edged lower after commodities prices fell on the China worries. The benchmark index in Shanghai plunged 7% after investors worried of stretched valuations. Japan voted out the Liberal Democratic Party after nearly five decades in power. Euro zone consumer prices fell at a slower pace.

[R]10:20 AM New York – Global stocks edged lower after commodities prices fell on the China worries. The benchmark index in Shanghai plunged 7% after investors worried of stretched valuations. Japan voted out the Liberal Democratic Party after nearly five decades in power. Euro zone consumer prices fell at a slower pace.[/R]

In New York trading stocks edged lower and commodities fell after Chinese stocks plunged in the overnight trading.

Gold fell 1% or $9.50 to $9.50 and crude oil decreased 3.4% or $2.43 to $70.31 a barrel.

Walt Disney Company ((DIS)) agreed to acquire Marvel Entertainment Inc in stock and cash transaction. Disney will offer per Marvel share $30 a share cash and 0.745 of its stocks in a deal that values the company at $4 billion.

Marvel surged 26% or $10.15 to $48.80 in the early New York trading.

Baker Hughes Inc decreased 7.3% to $35.30 after it agreed to acquire BJ Services for $5.5 billion. The BJ Services shareholders will receive 0.40035 share of Baker Hughes stock and $2.69 in cash per share. The offer was priced at 16% premium to Friday’s closing price.

Chinese Markets Plunge, Japan Votes LDP Out

Asian markets edged lower as investors worried that valuations may be ahead of market fundamentals. Shanghai benchmark index plunged 7% as the government crackdown on a steady rise of loans and prevent real estate bubble.

Voters in Japan forced LDP out of power after nearly five decades of unbroken hold on the government. The LDP has been increasingly seen as a party that is closely aligned with large businesses and lost touch with the common man.

The Democratic Party of Japan was swept in power with 308 seats in the lower house of the Diet with 480 members. The Liberal Democratic Party won 108 seats.

The DPJ promised to cut wasteful construction projects, provide direct assistance to families and offer child support for young couples. The DPJ hopes to soften the current recession blow to families by providing tax subsidies and putting more money in the hands of consumers and limit the government spending on large infrastructure projects.

Euro zone CPI Falls

Consumer prices index in the euro zone decreased 0.2% in August from a year ago month after falling at a faster pace 0.7% in July according to eurostat.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 41.61 or 0.40% to 10,492.53, Hang Seng index in Hong Kong decreased 374.43 or 1.86% to 19,724.19 and CSI 300 index in China lower 216.51 or 7.11% to 2,830.27. ASX 200 index in Australia decreased 10.50 or 0.23% to 4,479.10. The Market of Malaysia was closed today.

The Kospi Index in South Korea decreased 16.09 or 1.00% to close at 1,591.85. SET index in Thailand closed lower 3.73 or 0.57% to 653.25 and JSE Index in Indonesia decreased 35.71 or 1.50% to 2,341.54. The Sensex index in India decreased 255.70 or 1.61% to 15,666.64.

Europe Markets Review

In Paris CAC 40 Index decreased 26.06 or 0.71% to 3,667.08 and in Frankfurt DAX index traded lower 37.59 or 0.68% to 5,479.76. In Zurich trading SMI increased 9.48 or 0.15% to 6,221.06. The London market was closed today.