K
kangarooistan
Guest
slide amid subprime concerns
The plunge came after the Dow fell 387.18, or 2.83 per cent, to
13,270.68 in New York on Thursday [AP]
Stocks in major economies have continued to fall in early trading
in response to steep declines in the US subprime mortgages market.
Defaults on subprime loans, or those made to people with poor
credit, have climbed sharply in the US of late, setting off concern
about the impact on credit markets and putting a squeeze on cash
liquidity.
Dow index futures dropped by as much as 200 points on Friday amid
the fallout from losses related the subprime sector.
The European Central Bank [ECB] injected $83.3bn into the eurozone
banking market on Friday to boost liquidity, taking its total input to
$213bn in two days.
The injections enable commercial banks to borrow from the central
bank amid fears of a credit freeze linked to the US subprime market.
European slide
The ECB credits, which are in the form of loans, have come to more
than the amount injected shortly after the September 11, 2001 attacks
in the US, which shook global financial markets.
The US Federal Reserve also added a larger-than-normal $24bn in
temporary reserves to the US banking system.
European stocks fell on Friday, surrendering what was left of gains
made in 2007.
Banking shares were badly hit, with the Royal Bank of Scotland down
4.5 per cent, Barclays down 5 per cent, ABN AMRO dropping 7 percent,
and Credit Suisse falling 4 percent.
At 11:11 GMT, the pan-European FTSEurofirst 300 index was down 2.9
percent at 1,481.84 points, its biggest one-day slide since May 2003.
Markets suffer
Joining Friday's decline, the Bank of Japan said it had injected
$8.4bn into money markets to curb rises in a key overnight interest
rate.
Asian markets suffered dramatic losses on Friday morning after a
large sell-off of stocks on the New York Stock Exchange the following
day.
The Nikkei 225 index on Tokyo's Stock Exchange fell 2.61 per cent
to 16,721.96 during the morning session on Friday, while the broader
Topix index dropped by 2.91 per cent, to 1,634.87.
Yasuhisa Siozaki, Japan's chief cabinet secretary, played down the
concerns over the stock market slide and the apparent stumble in the
US economy.
"Apart from the decrease of housing construction, the US economy
basically remains in gradual recovery," he said.
"The Japanese economy is also recovering, driven by private sector
demand. However, the government continues to monitor the overall
economic market, including the stock market."
Hong Kong stocks fell 3.1 per cent, and as of 10:28am (02:28 GMT),
the Hang Seng index was down 694.51 points.
The Korea Composite Stock Price Index fell 3.7 per cent, to
1,838.35 before making a slight recovery.
Australia's benchmark S&P/ASX 200 dropped 2.8 per cent at 5,991.6,
having been as low as 5,982.5 earlier in the session.
Frozen funds
The plunge came after the Dow Jones industrial average fell 387.18,
or 2.83 per cent, to 13,270.68 in New York on Thursday.
The fall was precipitated by an announcement by French bank BNP
Paribas that it was freezing three funds it had in invested in US
subprime mortgages.
BNP's disclosure came less than 10 days after DWS, the mutual funds
arm of Deutsche Bank, the second-biggest bank in the eurozone, said it
would not be affected by activities in the subprime market.
Subprime mortgages are the most risky property loans, often offered to
people who experiencing payment difficulties or those with a poor
credit record.
Several major US companies have announced losses from exposure to
subprime loans over the past months.
Source: Agencies
Related:
Europe acts to calm markets
(09 Aug 2007)
Tools:
Email article
Print article
www.aljazeera.net
The plunge came after the Dow fell 387.18, or 2.83 per cent, to
13,270.68 in New York on Thursday [AP]
Stocks in major economies have continued to fall in early trading
in response to steep declines in the US subprime mortgages market.
Defaults on subprime loans, or those made to people with poor
credit, have climbed sharply in the US of late, setting off concern
about the impact on credit markets and putting a squeeze on cash
liquidity.
Dow index futures dropped by as much as 200 points on Friday amid
the fallout from losses related the subprime sector.
The European Central Bank [ECB] injected $83.3bn into the eurozone
banking market on Friday to boost liquidity, taking its total input to
$213bn in two days.
The injections enable commercial banks to borrow from the central
bank amid fears of a credit freeze linked to the US subprime market.
European slide
The ECB credits, which are in the form of loans, have come to more
than the amount injected shortly after the September 11, 2001 attacks
in the US, which shook global financial markets.
The US Federal Reserve also added a larger-than-normal $24bn in
temporary reserves to the US banking system.
European stocks fell on Friday, surrendering what was left of gains
made in 2007.
Banking shares were badly hit, with the Royal Bank of Scotland down
4.5 per cent, Barclays down 5 per cent, ABN AMRO dropping 7 percent,
and Credit Suisse falling 4 percent.
At 11:11 GMT, the pan-European FTSEurofirst 300 index was down 2.9
percent at 1,481.84 points, its biggest one-day slide since May 2003.
Markets suffer
Joining Friday's decline, the Bank of Japan said it had injected
$8.4bn into money markets to curb rises in a key overnight interest
rate.
Asian markets suffered dramatic losses on Friday morning after a
large sell-off of stocks on the New York Stock Exchange the following
day.
The Nikkei 225 index on Tokyo's Stock Exchange fell 2.61 per cent
to 16,721.96 during the morning session on Friday, while the broader
Topix index dropped by 2.91 per cent, to 1,634.87.
Yasuhisa Siozaki, Japan's chief cabinet secretary, played down the
concerns over the stock market slide and the apparent stumble in the
US economy.
"Apart from the decrease of housing construction, the US economy
basically remains in gradual recovery," he said.
"The Japanese economy is also recovering, driven by private sector
demand. However, the government continues to monitor the overall
economic market, including the stock market."
Hong Kong stocks fell 3.1 per cent, and as of 10:28am (02:28 GMT),
the Hang Seng index was down 694.51 points.
The Korea Composite Stock Price Index fell 3.7 per cent, to
1,838.35 before making a slight recovery.
Australia's benchmark S&P/ASX 200 dropped 2.8 per cent at 5,991.6,
having been as low as 5,982.5 earlier in the session.
Frozen funds
The plunge came after the Dow Jones industrial average fell 387.18,
or 2.83 per cent, to 13,270.68 in New York on Thursday.
The fall was precipitated by an announcement by French bank BNP
Paribas that it was freezing three funds it had in invested in US
subprime mortgages.
BNP's disclosure came less than 10 days after DWS, the mutual funds
arm of Deutsche Bank, the second-biggest bank in the eurozone, said it
would not be affected by activities in the subprime market.
Subprime mortgages are the most risky property loans, often offered to
people who experiencing payment difficulties or those with a poor
credit record.
Several major US companies have announced losses from exposure to
subprime loans over the past months.
Source: Agencies
Related:
Europe acts to calm markets
(09 Aug 2007)
Tools:
Email article
Print article
www.aljazeera.net
