[NYTr] Global stock markets tumble: face fresh rout

[All the News That Doesn't Fit]

AFP - Oct 22, 2007
http://www.afp.com/english/news/stories/071022170652.mm8bpsv8.html

Global stock markets face fresh rout

LONDON (AFP) - World equity markets tumbled again on Monday as investor
sentiment took a knock from fresh concerns over the US economic
outlook, a persistent credit squeeze and record highs for oil and the
euro.

Investors were rattled by a steep US decline on Friday, when worries
about the outlook for the world's largest economy grew amid poor
earnings news on the 20th anniversary of the New York market crash.

Elsewhere Monday, the European single currency hit a record 1.4347
dollars high. A strong euro makes eurozone exports more expensive for
buyers using weaker currencies, and therefore weighs on European
shares. The euro later stood at 1.4137 dollars.

In London, the FTSE 100 was down 1.05 percent to 6,459.30 points, while
in Paris the CAC 40 shed 1.38 percent at 5,661.27 points and
Frankfurt's DAX fell 1.13 percent to 7,794.94.

The Euro Stoxx 50 index of leading eurozone shares was down 1.32
percent at 4,352.91 points.

Across the Atlantic Wall Street steadied after a sharply weaker opening
with markets still skittish after last week's decline and fears of more
US economic turmoil ahead.

In midsession trade, the Dow Jones Industrial Average was off its worst
levels and down 0.31 percent to 13,479.83 while the Nasdaq composite
swung into positive territory, gaining 0.35 percent to

The broad-market Standard & Poor's 500 index was down a modest 0.11
percent to 1,498.96.

Global finance chiefs said over the weekend that the recent financial
market turbulence, high oil prices and a US housing downturn were
likely to "moderate" global growth from its recent robust levels.

"Investors have been spooked by three main things," said Barclays
Capital analyst Henk Potts on Monday.

"Number one, is concern that the problems we have been seeing in the
credit market could last longer than originally hoped, and number two
is the oil price reaching record levels last week.

"Number three, was some disappointing numbers from Caterpillar, which
was a sign that the problems we have been seeing are starting to affect
the corporate picture."

Potts added that global stock markets were still in positive territory
for the year despite the fresh downturn.

The Dow Jones index lost a hefty 2.64 percent on Friday after several
major companies reported soft earnings and showed caution about the
profit outlook.

Caterpillar, the US maker of heavy equipment which is regarded as
highly sensitive to global economic conditions, offered weak guidance
going forward.

"Uncertainty about the prospects for the US economy have increased
after disappointing earnings amid the credit tightening concerns," said
Kazuhiro Takahashi, equity general manager at Daiwa Securities SMBC.

The market has been sensitive to the financial sector given recent US
credit market problems. A weak earnings report from banking giant
Wachovia, which offered murky guidance going forward, added to market
worries.

The dollar suffered fresh losses after Group of Seven finance chiefs
refrained from voicing increased concern about currencies, which
markets took as a green light to drive the unit to another record low
against the euro.

The yen shot higher, hitting Japanese exporter shares, as the latest
stock market rout prompted investors to unwind risky bets funded by
selling the Japanese unit.

Japanese exporters have benefitted greatly from the weakness of the
yen, so investors react nervously to any sign of the currency
appreciating.

The Nikkei 225 index closed down 2.24 percent at 16,438.47, the lowest
closing level since September 26.

In Europe, shares in Electrolux dropped by 7.89 percent to 128.50
Swedish kronor, after disappointing third quarter results, on a
Stockholm market which was 2.31 percent lower.

Madrid's main IBEX 35 index lost 1.3 percent to 15,327.8 points,
Brussels fell 0.97 percent to 4,373.57, Milan was down 0.62 percent at
39,242 points, the Swiss Market Index shed 1.03 percent to 8,845.39
points and Amsterdam's AEX slipped 1.75 percent to 541.43 points.

Elsewhere in Asia Monday, Hong Kong lost 3.7 percent, while Seoul shed
3.4 percent and Shanghai shed 2.59 percent with Sydney 1.9 percent
lower.