September 8, 2008


Fears about a global economic slowdown, heightened by worsening United States job figures, have continued to undermine stock markets around the world. London’s FTSE 100 index lost 2.3 per cent - taking its weekly decline to seven per cent - its biggest since July 2002. Markets in Paris and Frankfurt fell by 2.5 per cent as economy concerns spread, the British Broadcasting Corporation News reported on Friday. On Wall Street, the Dow Jones index clawed back early losses to edge higher despite figures showing the US economy shed 84,000 jobs last month. But the benchmark US index still had its worst week since May. Earlier, Japan’s main share index fell nearly three per cent while markets in Hong Kong, China, Australia and India all slid two per cent. The US labour market figures - which showed the unemployment rate rising to 6.1 per cent - were a further jolt to investors who have had to swallow a slew of poor economic data in recent days. Economists had been expecting 75,000 jobs to be lost while the government also revised upwards. “This was an ugly number that pretty much confirms that our economy continues to trend downward,” said the Chief Investment Officer, Harris Private Bank, Mr. Jack Ablin. “This just knocks the legs out of any hope of seeing much economic improvement right now,” he added. The FTSE 100 closed down 2.3 per cent at 5,240.70 points. The last time it lost so much value in a week was more than six years ago in the wake of financial scandals such as Enron and WorldCom. Markets in Paris and Frankfurt continued their recent downward trend, both the Cac-40 index and the Dax-30 dropping about 2.5 per cent. The Dow Jones index, which lost three per cent on Thursday, rose 32.73 points, or 0.3 per cent to 11,220.96, but still ended down 2.8 per cent on the week. “Given the fact we were down so much on Thursday we are seeing a bit of a reflex rally with investors wanting to take advantages of some of the bargains,” said Bucky Hellwig, senior vice president at Morgan Asset Management. The Nasdaq index slipped 3.16 points, or 0.1 per cent to 2,255.88, ending the week 4.7 per cent lower. Earlier Japan’s benchmark Nikkei index fell 361.54 points to 12,196.12 amid a widespread sell-off of shares in Asia. The Hang Seng index fell more than three per cent in Hong Kong while markets also fell sharply in China, Australia and India. “Amid the uncertainty, few investors are willing to buy,” said Masayuki, Otani, chief market analyst at Securities Japan. “Several bad things happened at once,” he added, explaining the fall. Punch (online).

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