A look at economic developments and activity in major stock markets around the world Wednesday:
LONDON – World stock markets fell as another poor set of U.S. housing data kept investors uneasy ahead of the latest statement from the U.S. Federal Reserve and President Barack Obama’s first State of the Union address. The FTSE 100 index of leading British shares closed down 59.38 points, or 1.1 percent, at 5,217.47 while Germany’s DAX fell 25.73 points, or 0.5 percent, at 5,643.20. The CAC-40 in France fell 47.24 points, or 1.2 percent, to 3,759.80.
BRUSSELS – The European Union will unfreeze a bailout loan installment of 1 billion euros ($1.41 billion) for Romania after the country moved to curbed its budget deficit, the EU’s top economy official said. A joint 20 billion euros bailout from the International Monetary Fund, the European Union and the World Bank was suspended in October after the Romanian parliament dismissed the government, partly over tough spending plans demanded by the lenders. The 2010 budget was approved earlier this month, shortly after President Traian Basescu was re-elected, ending months of political instability.
BERLIN – The German government raised its economic growth forecast for the year to 1.4 percent amid a recovery in exports, but cautioned that there is still great uncertainty over the outlook. The outlook was up from the 1.2 percent growth forecast by the government in mid-October, and Economy Minister Rainer Bruederle said he still is staying „at the lower end of forecasts.” The economy technically emerged from recession in last year’s second quarter but still contracted by 5 percent overall in 2009, by far the worst performance since World War II. The government predicted a 5.1 percent increase in exports this year, following last year’s steep 14.1 percent decline. It forecasts that imports will rise by 3.4 percent, recovering from an 8.9 percent fall in 2009.
LONDON – Britain’s economic recovery is „clouded by great uncertainty” amid likely big cuts to public spending and continued tight access to credit, a Bank of England policy maker said. But Andrew Sentance, a member of the bank’s nine-strong rate-setting committee, added that policy makers needed to be ready to crack down on inflation as import and services prices rise. Sentance was speaking a day after official statistics revealed that Britain’s worst recession since World War II is officially over – but only just. A feeble 0.1 percent rise in gross domestic product in the final quarter of 2009 was enough to officially end a grinding 18-month recession, but fell short of expectations of a stronger 0.3 to 0.4 percent rise. The Office for National Statistics also acknowledged that the figure could be revised up or down by around 01.-0.2 percent in the next two estimates for the quarter.
LISBON, Portugal – Portugal’s Socialist government intends to cut government jobs and freeze civil servants’ pay to reduce the country’s ballooning debt and head off a budget crisis like the one in Greece that has shaken the European Union. Finance Minister Fernando Teixeira dos Santos said late Tuesday that Portugal’s budget deficit is expected to have reached a record 9.3 percent of gross domestic product last year – way above the 3 percent allowed for countries using the euro. Teixeira dos Santos said cuts would bring the deficit down to 8.3 percent this year. The government’s goal is to bring the deficit to below 3 percent by 2013.
REYKJAVIK, Iceland – Iceland’s central bank cut its key interest rate by half a point to 9.5 percent. The seven-day collateral lending rate peaked at 18 percent in October 2008 as Iceland’s banking system collapsed under the strain of a global credit crisis. Sedlabanki, the central bank, also trimmed its deposit rate on current accounts by half a point to 8.0 percent.
TOKYO – Japan’s exports grew for the first time in 15 months in December as robust Asian demand fueled recovery in the world’s second-biggest economy. Exports jumped 12.1 percent from a year earlier to 5.4 trillion yen ($60 billion) in the month, the finance ministry said. Asia-bound exports, which account for more than 50 percent of Japan’s total shipments, surged 31.2 percent to 3.0 trillion yen. Japan’s exports to China soared 42.8 percent to 1.1 trillion yen on brisk sales of cars, plastics and organic chemicals. Meanwhile, Japanese shares dropped for a fourth session as investors awaited President Barack Obama’s State of the Union address and Toyota ( TM – news – people ) tumbled after halting sales of top-selling models in the U.S. The benchmark Nikkei 225 stock average lost 73.20 points, or 0.7 percent, to 10,252.08 – a fresh five-week closing low. The broader Topix index fell 1 percent to 907.67.
SEOUL, South Korea – South Korea’s current account surplus swelled to a record high in 2009, a big turnaround from a deficit the year before when foreign investors fled the country. The country’s broadest measure of trade and investment ended $42.67 billion in the black last year, the Bank of Korea said. The figure was an all-time high, said BOK statistics official Kim Sung-hwan. South Korea had recorded a deficit of $5.78 billion in 2008, the first dip into the red in the current account since a shortfall of $8.29 billion in 1997 when the country was hit by the Asian financial crisis. Investors in the country’s stock market had been withdrawing funds from South Korea as the world economy slowed during 2008. The global financial crisis later in the year added to the capital flight.
SHANGHAI – Chinese shares fell for a fourth day on concern the government is winding down its stimulus. The benchmark Shanghai Composite Index shed 32.79 points, or 1.1 percent, to close at 2,986.61 – its first close below the symbolic 3,000 level in three months. The Shenzhen Composite Index for China’s smaller second exchange slipped 0.8 percent to 1,103.64. Investor concern was prompted by news reports that some banks were ordered to curb loans to comply with monthly credit targets. Markets were rattled last week when Beijing raised bank reserves to control lending and cool inflation.
Copyright 2009 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed
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A look at global economic developments
A look at economic developments and activity in major stock markets around the world Wednesday:
LONDON – World stock markets fell as another poor set of U.S. housing data kept investors uneasy ahead of the latest statement from the U.S. Federal Reserve and President Barack Obama’s first State of the Union address. The FTSE 100 index of leading British shares closed down 59.38 points, or 1.1 percent, at 5,217.47 while Germany’s DAX fell 25.73 points, or 0.5 percent, at 5,643.20. The CAC-40 in France fell 47.24 points, or 1.2 percent, to 3,759.80.
BRUSSELS – The European Union will unfreeze a bailout loan installment of 1 billion euros ($1.41 billion) for Romania after the country moved to curbed its budget deficit, the EU’s top economy official said. A joint 20 billion euros bailout from the International Monetary Fund, the European Union and the World Bank was suspended in October after the Romanian parliament dismissed the government, partly over tough spending plans demanded by the lenders. The 2010 budget was approved earlier this month, shortly after President Traian Basescu was re-elected, ending months of political instability.
BERLIN – The German government raised its economic growth forecast for the year to 1.4 percent amid a recovery in exports, but cautioned that there is still great uncertainty over the outlook. The outlook was up from the 1.2 percent growth forecast by the government in mid-October, and Economy Minister Rainer Bruederle said he still is staying „at the lower end of forecasts.” The economy technically emerged from recession in last year’s second quarter but still contracted by 5 percent overall in 2009, by far the worst performance since World War II. The government predicted a 5.1 percent increase in exports this year, following last year’s steep 14.1 percent decline. It forecasts that imports will rise by 3.4 percent, recovering from an 8.9 percent fall in 2009.
LONDON – Britain’s economic recovery is „clouded by great uncertainty” amid likely big cuts to public spending and continued tight access to credit, a Bank of England policy maker said. But Andrew Sentance, a member of the bank’s nine-strong rate-setting committee, added that policy makers needed to be ready to crack down on inflation as import and services prices rise. Sentance was speaking a day after official statistics revealed that Britain’s worst recession since World War II is officially over – but only just. A feeble 0.1 percent rise in gross domestic product in the final quarter of 2009 was enough to officially end a grinding 18-month recession, but fell short of expectations of a stronger 0.3 to 0.4 percent rise. The Office for National Statistics also acknowledged that the figure could be revised up or down by around 01.-0.2 percent in the next two estimates for the quarter.
LISBON, Portugal – Portugal’s Socialist government intends to cut government jobs and freeze civil servants’ pay to reduce the country’s ballooning debt and head off a budget crisis like the one in Greece that has shaken the European Union. Finance Minister Fernando Teixeira dos Santos said late Tuesday that Portugal’s budget deficit is expected to have reached a record 9.3 percent of gross domestic product last year – way above the 3 percent allowed for countries using the euro. Teixeira dos Santos said cuts would bring the deficit down to 8.3 percent this year. The government’s goal is to bring the deficit to below 3 percent by 2013.
REYKJAVIK, Iceland – Iceland’s central bank cut its key interest rate by half a point to 9.5 percent. The seven-day collateral lending rate peaked at 18 percent in October 2008 as Iceland’s banking system collapsed under the strain of a global credit crisis. Sedlabanki, the central bank, also trimmed its deposit rate on current accounts by half a point to 8.0 percent.
TOKYO – Japan’s exports grew for the first time in 15 months in December as robust Asian demand fueled recovery in the world’s second-biggest economy. Exports jumped 12.1 percent from a year earlier to 5.4 trillion yen ($60 billion) in the month, the finance ministry said. Asia-bound exports, which account for more than 50 percent of Japan’s total shipments, surged 31.2 percent to 3.0 trillion yen. Japan’s exports to China soared 42.8 percent to 1.1 trillion yen on brisk sales of cars, plastics and organic chemicals. Meanwhile, Japanese shares dropped for a fourth session as investors awaited President Barack Obama’s State of the Union address and Toyota ( TM – news – people ) tumbled after halting sales of top-selling models in the U.S. The benchmark Nikkei 225 stock average lost 73.20 points, or 0.7 percent, to 10,252.08 – a fresh five-week closing low. The broader Topix index fell 1 percent to 907.67.
SEOUL, South Korea – South Korea’s current account surplus swelled to a record high in 2009, a big turnaround from a deficit the year before when foreign investors fled the country. The country’s broadest measure of trade and investment ended $42.67 billion in the black last year, the Bank of Korea said. The figure was an all-time high, said BOK statistics official Kim Sung-hwan. South Korea had recorded a deficit of $5.78 billion in 2008, the first dip into the red in the current account since a shortfall of $8.29 billion in 1997 when the country was hit by the Asian financial crisis. Investors in the country’s stock market had been withdrawing funds from South Korea as the world economy slowed during 2008. The global financial crisis later in the year added to the capital flight.
SHANGHAI – Chinese shares fell for a fourth day on concern the government is winding down its stimulus. The benchmark Shanghai Composite Index shed 32.79 points, or 1.1 percent, to close at 2,986.61 – its first close below the symbolic 3,000 level in three months. The Shenzhen Composite Index for China’s smaller second exchange slipped 0.8 percent to 1,103.64. Investor concern was prompted by news reports that some banks were ordered to curb loans to comply with monthly credit targets. Markets were rattled last week when Beijing raised bank reserves to control lending and cool inflation.
Copyright 2009 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed
NBA Team Valuations General Mills’ Mark Addicks The Semiconductor Power Is Back Street Looks To Washington
Read the article on Forbes
