Global markets wobble as credit fears persist
Saturday, 25 August 2007
NEW YORK, Aug 24 (AFP): Wobbles returned to global stock markets yesterday as fears of a credit squeeze resurfaced following the US Federal Reserve's move to increase its liquidity injection to markets.
The Dow Jones Industrial Average gave back early gains and finished essentially flat, with a loss of a fractional 0.25 point at 13,235.88.
The Nasdaq composite dropped 11.10 points (0.43 per cent) to 2,541.70 and the Standard & Poor's 500 broad-market index shed 1.57 points (0.11 per cent) to close at 1,462.50.
A day after hefty gains in most global markets, US stocks opened strong on news that Bank of America had agreed to invest two billion dollars in troubled US mortgage giant Countrywide Financial Corporation.
Markets began to waver after news that the Federal Reserve had injected 17.25 billion dollars into the financial system in three actions Thursday, the latest in a series of moves designed to ease a credit squeeze in global markets.
The moves left market participants "struggling to grasp the extensiveness of the credit turmoil and again wondering if borrowers are in fact getting the credit they need," said analysts at Briefing.com.
The European Central Bank meanwhile added 40 billion euros (54 billion dollars) in three-month funds to the money market to cut borrowing costs in one of the areas hardest hit by the US subprime crisis.
Some analysts said the market has not yet fully discounted the impact of the liquidity squeeze.
In London the FTSE 100 index closed up a mere 0.01 per cent at 6,196.90, while in Frankfurt the DAX 30 gained 0.15 per cent to 7,511.96 and the Paris CAC 40 rose 0.09 per cent to 5,523.33.
The Euro Stoxx 50 index of leading eurozone shares gained 0.16 per cent to 4,233.35.
In other markets, Brazil's Bovespa gained 0.2 per cent and Mexico's Bolsa advanced 0.65 per cent. In Canada, the S&P/TSX Composite fell 0.9 per cent.
Earlier in Asia a positive lead from China galvanised buying interest after Shanghai shares smashed through the 5,000-point level for the first time.
Tokyo's main shares index soared by 2.61 per cent to end at 16,316.32 points, regaining the key 16,000 points level as the Bank of Japan held interest rates at 0.50 per cent.
Elsewhere, Hong Kong ended 2.77 per cent higher, Seoul gained 2.3 per cent, Sydney rose 2.6 per cent and Wellington added 1.38 per cent.
The Dow Jones Industrial Average gave back early gains and finished essentially flat, with a loss of a fractional 0.25 point at 13,235.88.
The Nasdaq composite dropped 11.10 points (0.43 per cent) to 2,541.70 and the Standard & Poor's 500 broad-market index shed 1.57 points (0.11 per cent) to close at 1,462.50.
A day after hefty gains in most global markets, US stocks opened strong on news that Bank of America had agreed to invest two billion dollars in troubled US mortgage giant Countrywide Financial Corporation.
Markets began to waver after news that the Federal Reserve had injected 17.25 billion dollars into the financial system in three actions Thursday, the latest in a series of moves designed to ease a credit squeeze in global markets.
The moves left market participants "struggling to grasp the extensiveness of the credit turmoil and again wondering if borrowers are in fact getting the credit they need," said analysts at Briefing.com.
The European Central Bank meanwhile added 40 billion euros (54 billion dollars) in three-month funds to the money market to cut borrowing costs in one of the areas hardest hit by the US subprime crisis.
Some analysts said the market has not yet fully discounted the impact of the liquidity squeeze.
In London the FTSE 100 index closed up a mere 0.01 per cent at 6,196.90, while in Frankfurt the DAX 30 gained 0.15 per cent to 7,511.96 and the Paris CAC 40 rose 0.09 per cent to 5,523.33.
The Euro Stoxx 50 index of leading eurozone shares gained 0.16 per cent to 4,233.35.
In other markets, Brazil's Bovespa gained 0.2 per cent and Mexico's Bolsa advanced 0.65 per cent. In Canada, the S&P/TSX Composite fell 0.9 per cent.
Earlier in Asia a positive lead from China galvanised buying interest after Shanghai shares smashed through the 5,000-point level for the first time.
Tokyo's main shares index soared by 2.61 per cent to end at 16,316.32 points, regaining the key 16,000 points level as the Bank of Japan held interest rates at 0.50 per cent.
Elsewhere, Hong Kong ended 2.77 per cent higher, Seoul gained 2.3 per cent, Sydney rose 2.6 per cent and Wellington added 1.38 per cent.