Don't miss

Replay


LATEST SHOWS

EYE ON AFRICA

Togo : will president Faure Gnassingbe win a third 5-year term ?

Read more

MEDIAWATCH

Controversy reigns 100 years after the Armenian genocide

Read more

THE WORLD THIS WEEK

Migrant Deaths: Politicians Divided after Emergency EU Summit

Read more

THE WORLD THIS WEEK

The G-Word: Turkey and the Armenian Genocide

Read more

FRANCE IN FOCUS

What will the new French healthcare bill change?

Read more

#TECH 24

Space Special: Happy Birthday, Hubble!

Read more

FOCUS

Video: Meeting Marseille's Armenian community

Read more

REPORTERS

Saving French soldiers' WWI trench carvings

Read more

ENCORE!

Armenia, 100 years on

Read more

Business

Stock and oil prices continue to fall on economic worries

Text by NEWS WIRES

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

COMMENT(S)