4 de diciembre 2007 - 00:00

Wall Street and Europe crash

Wall Street and Europe crash
Main global markets trade with a negative trend. In New York, Dow Jones plummets 0.2 per cent; S&P500, 0.4 per cent; and NASDAQ, 0.4 per cent. London plunges 1.1 per cent; Paris, 1.5 per cent; and Madrid, 0.2 per cent. In Asia, Tokio posted a 0.9-per cent low.

Asia

Renewed worries about the U.S. economy kept a lid on Asian stock markets on Tuesday, but helped lift the low-yielding yen and safe-haven government bonds as investors sought less risky assets.

European stocks were set to open slightly weaker, with financial bookmakers forecasting opening losses of up to 13 points for major indexes in Germany, France and the UK on a relatively quiet day for corporate and economic news.

Signs of flagging economic growth in the United States sent Shanghai zinc prices falling by their 4 percent limit, and pushed up demand for safe-haven government bonds. Japanese government bond futures hit a 22 month high, further aided by a strong bond auction.

Caution grew on the back of data showing growth in U.S. factory activity slipped in November to the lowest since January and after Federal Reserve policy makers gave a sober assessment of the world's biggest economy, offsetting hopes for another U.S. interest rate cut at next week's Fed meeting.

"People are still very hesitant about getting back into the market. There's still a lot of volatility around and a lot of investor caution," said Juliette Saly, market analyst at CommSec in Sydney.

Tokyo's Nikkei average ended nearly 1 percent lower, but MSCI's measure of other Asia Pacific stocks edged up about 0.2 percent.

Adding to market worries was uncertainty surrounding plans to shore up the U.S. mortgage market, which Treasury Secretary Henry Paulson said he hoped would be ready by the end of the week.

The MSCI index has fallen about 9 percent from a record high on Nov. 1, but is still up about 35 percent this year, strongly outperforming a 10 percent rise in MSCI's key world stock index.

U.S. crude crept towards $90 a barrel, continuing to steady from last week's record slide of nearly $10, while gold was also less choppy, hovering just above $790 an ounce.

BANKS MOSTLY SOFTER

Financial stocks pared recent gains, with Australia's top investment bank Macquarie Group shedding 1.4 percent, Japan's Mizuho Financial slipping 0.8 percent and South Korea's Shinhan Financial dropping 2.3 percent.

Major exporters also came under pressure as investors fretted about the health of the U.S. economy. Toyota fell 1 percent after posting a 7 percent drop in U.S. sales for its luxury Lexus brand, although overall sales edged up 0.3 percent.

Investors also sold the major miners on weak base metals prices. BHP Billiton lost 0.2 percent, takeover target Rio Tinto shed 2.6 percent and Toho Zinc fell 4.4 percent.

YEN FIRMER

But weakness in stock markets helped underpin the low-yielding yen as investors unwound risky carry trades.

The dollar eased towards 110 yen from an overnight high above 111 yen, while the euro dipped below 162 yen and was well off Friday's high near 164 yen.

Against the dollar, the single European currency fetched $1.4665, still hovering near a two-week low of about $1.4620 set on Monday.

Key events this week including the outcome of the European Central Bank policy meeting on Thursday as well as the influential U.S. jobs report on Friday were also keeping investors wary.

"There's so much data later this week. It still feels like the market doesn't want to hold risky assets," said Sean McGoldrick, head of FX trading at Morgan Stanley in Tokyo

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