Asian, European stocks tumble again
Wednesday, 16 July 2008
Asian and European stock markets fell sharply Tuesday as investors' confidence in the US financial system eroded further despite a government-backed plan to help beleaguered mortgage financiers Fannie Mae and Freddie Mac.
Financials were hit particularly hard as investors worried that trouble in the US markets would spill over to Asia and Europe.
In Asia, every major index suffered declines, with Hong Kong's Hang Seng Index dropping more than 3.8 per cent and Taiwan's benchmark losing over 4.5 per cent. In Tokyo, the Nikkei 225 index dropped nearly 2.0 per cent to close at 12,754.56.
Japanese traders were rattled by a local business newspaper report that the country's top three banks hold a combined 4.7 trillion yen (US$44 billion) in Fannie Mae and Freddie Mac debt. Another newspaper report unnerved Taiwan's market with news that at least two leading financial institutions have invested in the mortgage giants, and the country's central bank may also have purchased their bonds.
By afternoon in Europe, Britain's FTSE 100 had fallen 2.55 per cent to 5,165.20, Germany's DAX lost 2.60 per cent at 6,039.20 and France's CAC-40 retreated 2.18 per cent to 4,052.28.
Fears of yet more bank losses in Europe weighed on stocks. Several major banks have written off billions and had to raise more capital.
Financials were hit particularly hard as investors worried that trouble in the US markets would spill over to Asia and Europe.
In Asia, every major index suffered declines, with Hong Kong's Hang Seng Index dropping more than 3.8 per cent and Taiwan's benchmark losing over 4.5 per cent. In Tokyo, the Nikkei 225 index dropped nearly 2.0 per cent to close at 12,754.56.
Japanese traders were rattled by a local business newspaper report that the country's top three banks hold a combined 4.7 trillion yen (US$44 billion) in Fannie Mae and Freddie Mac debt. Another newspaper report unnerved Taiwan's market with news that at least two leading financial institutions have invested in the mortgage giants, and the country's central bank may also have purchased their bonds.
By afternoon in Europe, Britain's FTSE 100 had fallen 2.55 per cent to 5,165.20, Germany's DAX lost 2.60 per cent at 6,039.20 and France's CAC-40 retreated 2.18 per cent to 4,052.28.
Fears of yet more bank losses in Europe weighed on stocks. Several major banks have written off billions and had to raise more capital.