Don't miss




A piece of history: Five former US presidents gather for hurricanes fundraiser

Read more


Chic hotels and horse races: Calais tries to shed its 'Jungle' image

Read more


Kenyatta and Odinga call for peace before Kenya's election rerun

Read more


Kurdish referendum a ‘colossal mistake’, says son of late president Talabani

Read more


The new 30s club: NZ's Jacinda Ardern joins list of maverick leaders

Read more


After Raqqa; Xi's the boss; and Spain enters unchartered waters

Read more


The Dictator's Games: A rare look inside Turkmenistan

Read more

#TECH 24

Teaching maths with holograms

Read more


Is China exporting its pollution?

Read more


Stock and oil prices continue to fall on economic worries


Latest update : 2009-06-23

Global stocks and oil prices continued to fall on Tuesday as widespread doubts about a nascent economic recovery, highlighted by a gloomy World Bank report, weighed on market sentiment.

AFP - Asian stocks tumbled Tuesday, tracking a slump on Wall Street, as fears returned that a global economic recovery may not be as quick as hoped following a grim report from the World Bank.

Commodity and energy stocks bore the brunt of selling as the Bank slashed its forecast for developing nations' economies.

At the Tokyo Stock Exchange, the headline Nikkei index ended down 2.82 percent, while Sydney plummeted 3.10 percent and Hong Kong's Hang Seng Index was 2.74 percent lower in the afternoon.

Taiwan's weighted index ended down 2.27 percent. China's Shanghai Composite Index lost 1.40 percent by midday and the Straits Times index in Singapore dropped 1.60 percent in the afternoon.

European markets were also lower, with London's FTSE 100 off 0.23 percent, Frankfurt's DAX 30 down 0.28 percent and the CAC 40 in Paris 0.83 percent lower.

Profit-taking after a rally that lasted more than three months also weighed on Asian shares, particularly in the wake of a sharp overnight fall in New York, analysts said.

"The declines in share and commodity markets can simply be put down to good, old-fashioned profit-taking," said Craig James, chief economist at CommSec.

"The rally in commodity prices went too far, too soon. Fund managers are urgently trying to lock in gains."

Commodities firms had been pushed higher by rising crude prices, which passed 73 dollars earlier this month before falling back and below 67 dollars Tuesday.

Erwin Balita, research head at SB Equities in the Philippines, echoed the assessment and said the weakness was expected as a natural correction from recent market strength.

"This is part of the correction we've been anticipating after the heady rise in the past three months," he said.

Regional shares plunged after US stocks registered Monday their worst single-day loss in two months, sending the Dow Jones Industrial Average down 2.35 percent, adding to a big sell-off last week.

Investor jitters were aggravated by the report from the World Bank that estimated growth among developing economies at a meagre 1.2 percent, much lower than the previous two years.

"People are a bit shocked," Chris Blair, Patersons' head of Sydney retail trading, said noting investors' delayed reaction to the downgrade.

Barclays Capital voiced its worries that a possible weakening of Chinese demand will further depress sentiment.

The largest factor pushing market weakness was "speculation surrounding the possibility of a slowdown in Chinese import buying of commodities," the investment bank said.

"(We feel) this poses the single biggest downside risk, especially for metal and agricultural prices. There are already some early signals that Chinese demand is beginning to ebb," Barclays Capital said.

Date created : 2009-06-23