Date : Friday, August 17, 2007
Writer : AP / Toby Anderson
(LONDON) — European and Asian stocks slid again Friday amid persistent fears about subprime mortgage lending troubles in the U.S. and its potential affect on the global economy.
The U.K.'s FTSE 100 fell 0.31 percent to 5840.50, as the benchmark index has lost 12.5 percent in the past month. France's CAC 40 index lost 0.43 percent to 5243.050 and Germany's DAX index was down 0.56 percent to 7229.510 as stocks failed to take a lead from a late rally on Wall Street on Thursday.
Some Asian markets saw early bargain-hunting, but began falling across the board on a worldwide selloff that has lasted more than a week.
"The fear factor has overtaken people," said Song Sen Wun, regional economist at CIMB-GK Research Pte. Ltd, but said cooler heads may prevail as early as Monday.
"Whether this is a case of blind panic remains to be seen," he said.
In Japan, a further fall of the dollar against the yen, which hurts Japan's giant exporters like Toyota Motor Corp. and Sony Corp., sent the Nikkei 225 index crashing 5.4 percent to end at 15,273.68, its lowest close in a year.
Hong Kong's blue chip Hang Seng Index fell 1.4 percent, and the Korea Composite Stock Price Index lost 3.2 percent after dropping 6.9 percent the previous session.
China's shares, which had been hitting new daily highs recently, fell for a second day Friday. The benchmark Shanghai Composite Index ended down 2.3 percent at 4656.57 points, adding to a 2.1 percent loss the previous day. The Shenzhen Composite Index fell 1.6 percent to 1297.21.
Credit Suisse Chief Strategist Shinichi Ichikawa said any bad news ahead, such as a bank abroad faltering, could worsen the market jitters.
"The next couple of weeks will be a very tough time for global financial markets," he said.
U.S. stock futures faltered Friday as investors nervously eyed the global declines. Although Wall Street had a late recovery to finish mixed Thursday — with the Dow Jones Industrial Average Thursday closing down just 16 points after falling more than 340 points during the day — there was little conviction in the market that could allow it to build on that momentum.
Earlier Friday, Japan's central bank injected 1.2 trillion yen ($10.5 billion) into money markets — the third injection this week and triple the amount it injected the day before — in a bid to curb rises in key interest rates.
Central banks in the U.S., Europe, Australia and Japan have injected tens of billions of dollars into money markets since Aug. 9, when stocks tumbled because of worries over U.S. subprime mortgage problems. So, far the extra money, meant to ease concerns about a credit crunch, has been unable to halt the global selloff.
A weaker dollar led some stocks down, as a lower dollar hurts Japanese and European exporters by reducing the value of their overseas earnings when converted back into local currencies. A weak dollar also makes Japanese and European exports more expensive abroad.
Toyota Motor Corp. fell 7.2 percent Friday, and Sony Corp. fell 6.8 percent. Suzuki Motor Corp. fell 11 percent and gamemaker Nintendo Co., which relies on overseas sales for much of its revenue, fell 9.7 percent.
Automaker DaimlerChrysler dropped 2.5 percent in Frankfurt, where supplier Continental AG lost 2.3 percent. Chemical company BASF fell 2.1 percent and Bayer declined 2 percent.
AP Business Writer By Yuri Kageyama in Tokyo contributed to this report.
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