Global Markets Decline; Brazil, Canada Lead

Mukesh Buch
28 Oct, 2009
New York City

Losses in the late afternoon trading in the Americas dragged markets lower in New York, Toronto and Sao Paolo. Argentina plunged 6%. European markets closed down more than 2% and Asian markets traded weak on tighter monetary policy talks.

[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – Losses in the late afternoon trading in the Americas dragged markets lower in New York, Toronto and Sao Paolo. Argentina plunged 6%. European markets closed down more than 2% and Asian markets traded weak on tighter monetary policy talks.[/R]

Stocks worldwide declined with resource heavy economies led the decliners. Brazil Bovespa index dropped nearly 4.8% and indexes in Canada, Australia and Europe dropped between 1.4% and 2.6%.

The dollar gained as investors unwind carry trade. Brazil has lost 11% in the last eight trading days after it levied 2% tax to foreign investors.

In New York trading, Apollo Group plunged after SEC opened an informal revenue recognition inquiry. Panera Bread rose after its quarterly net surged 38%. Visa Inc swung to a quarterly profit of 69 cents a share. Harris Corporation led gainers in the S&P 500 index with a rise of 8.3%.

UK banks declined after the government advances the plan to separate bad loans at three largest troubled banks that are operating under its supervision. Prudential Plc dropped 10% after it reported weak results. GlaxoSmithKline quarterly sales rise on weak pound and one-time sale of H1N1 treatment.

European markets dropped more than 2% after the worries that banks may need more capital and weak sales outlook from SAP AG.

Deutsche Bank agreed to pay 1 billion to acquire Germany’s largest private bank Sal. Oppenheim Group. ArcelorMittal quarterly sales fell 54%. TUI AG falls on €250 million bond offering plan.

Norway increased its key lending rate by 25 basis points to 1.5% and joins five other nations that have either raised or tightened monetary policy.

Stocks in Mumbai fell for the second day on the worries that rising interest rates and inflation may force government to withdraw economic stimulus. HCL Technologies and Firstsource declined on lower than expected earnings. GAIL India Ltd net drops 30%.

North American Markets

Dow Jones Industrial Average declined 119.48 or 1.2% to a close of 9,762.69, S&P 500 Index fell 20.78 or 2% to 1,042.63, and Nasdaq Composite Index declined 56.48 or 2.7% to close at 2,059.61. Toronto TSX Composite Index fell 248.21 or 2.2% to 10,805.33.

Of the stocks in S&P 500 index, 50 increased, 469 declined and 1 was unchanged.

Goodyear Tire & Rubber Company led the decliners in the S&P 500 index with a loss of 19.6% followed by losses in Apollo Group, Inc of 17.7%, in Molex Inc of 12.5%, in New York Times of 11.8% and in Gannett Company of 10.1%.

Harris Corporation led gainers in the S&P 500 index with a rise of 9.8% followed by gains in AIG 3.9%, in Verizon Communications of 2.6% and in Pall Corp of 2.4%.

South American Markets Indexes

Mexico Bolsa Index decreased 679.82 or 2.3% to 28,633.02 and Brazil Bovespa Stock Index dropped 2,998.73 or 4.75% to 60,162.31.

Argentina Merval Index plunged 6.1% and Chile Stock Market Select index fell 1.5% and Colombia IGBC General Index increased 0.2% and Peru Lima General Index decreased 3.8%.

Europe Markets Review

In London FTSE 100 Index closed lower 106.68 or 2.05% to 5,094.29, in Paris CAC 40 Index decreased 73.60 or 1.97% to close at 3,670.35, in Frankfurt DAX index lower 112.53 or 2.00% to close at 5,522.49. In Zurich trading SMI decreased 81.56 or 1.28% to close at 6,286.41.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 137.41 or 1.35% to 10,075.05, Hang Seng index in Hong Kong decreased 408.01 or 1.84% to 21,761.58, and CSI 300 index in China higher 14.60 or 0.44% to 3,329.33. ASX 200 index in Australia decreased 68.40 or 1.44% to 4,685.10. The FTSE Bursa KL Composite index in Malaysia was lower 11.25 or 0.89% to 1,249.05.

The Kospi Index in South Korea decreased 39.82 or 2.41% to close at 1,609.71, SET index in Thailand closed lower 10.59 or 1.48% to 703.95. JSE Index in Indonesia decreased 69.89 or 2.88% to 2,355.31. The Sensex index in India decreased 69.91 or 0.43% to 16,283.49.

Commodities, Metals, and Currencies

Crude oil decreased $2.36 to $77.19 a barrel for a front month contract, natural gas edged down 22 cents to $5.06 per mBtu and gasoline decreased 8.55 cents to 198.50 cents.

Soybean future closed down 6.00 cents to $9.70 a bushel. Wheat futures closed down 8.50 cents in Chicago trading to $4.94 a bushel. Sugar closed down 0.72 cent 21.93 cents.

Gold decreased $7.60 in New York trading to close at $1,027.80 per ounce, silver closed down $0.39 to $16.15 per ounce and copper for the front month delivery decreased 7.70 cent to $2.92 per pound.

Dollar edged up against euro to $1.4705 and fell against the Japanese yen to 90.82.

Yield on 10-year U.S. bonds decreased to 3.41% and with 30-year maturities decreased to 4.26%.