25 Sep 2008

Global stocks slip on unease over bailout

7:36 am on 25 September 2008

Global stocks were mostly lower on Wednesday as unease about a US government bailout kept investors on edge.

There are concerns over when Congress will act on a proposed $US700 billion rescue of troubled banks.

Shares rose in Asia on news of a $US5 billion investment in Goldman Sachs by billionaire Warren Buffett on Tuesday, but not in Europe.

The FTSEurofirst 300 index of top European shares closed 0.63% lower at 1,101.60 points, falling for the third consecutive session. Mining and energy shares were among the biggest losers.

In Frankfurt, the DAX index ended at 6052.87 points, down 15.66 or 0.26%. In Paris, the CAC-40 index closed at 4114.54 points, down 25.28 or 0.61%. The Swiss market index closed at 6780.34 points, down 25.19 or 0.37%.

In Britain, the FTSE 100 closed down 40.6 points, or 0.8% at 5,095.6, after losing 1.9% on Tuesday. Trading was thin. The index is down 21% this year to date.

By 1pm in the United States, the Dow Jones industrial average was down 23.18 points, or 0.21%, at 10,830.99.

Standard & Poor's 500 Index was down 1.47 points, or 0.12%, at 1,186.75. However, the Nasdaq Composite Index was up 8.20 points, or 0.38%, at 2,161.53.

Euro zone government debt rose as weakening business morale in Germany, France and Italy offered more evidence that the region is sinking into recession and could lead the European Central Bank to cut interest rates in the future.

US government debt also rose. An big thrust into T-bills sent one-month rates a touch below zero percent overnight and three-month rates below 0.50 percent.

The dollar rose against major currencies. Oil also rose. US light sweet crude oil was up 33 cents to $US106.94 a barrel.

Spot gold prices fell slightly, by $US2.70 to $US888.00 an ounce. Trading in commodities was volatile.

NZ & Australia

The New Zealand sharemarket rose 31 points to close at 3260 on turnover of $87 million on Wednesday.

Telecom was up 4 cents to $2.84, while Fletcher Building was up 9c to $7.39 and Contact Energy slid 10c to $8.50.

Kiwi Income Property Trust was down 4c to $1.18 after announcing that its property portfolio tumbled $51 million in value in the past six months, to just over $2 billion.

Austral Pacific was down 8c to 33c a share after announcing a review of its business.

The Australian sharemarket also closed higher, with the benchmark S&P/ASX200 index up 58.4 points, or 1.19%, to 4,981.9, while the broader All Ordinaries lifted 50.5 points, or 1.02%, to 5,008.2.

The price of gold in Sydney was $US888.90 per fine ounce, down $US1.80 on Tuesday's close of $US890.70.

Asian markets

In Japan, share prices closed up 0.20%, reversing early losses.

The Tokyo Stock Exchange's benchmark Nikkei-225 index rose 24.44 points to end at 12,115.03.

Hong Kong share prices closed 0.5% higher after strong early gains were wiped out by rumours of instability at the Bank of East Asia, dealers said.

The benchmark Hang Seng Index closed up 89.14 points at 18,961.99. Turnover was light at HK$59.01 billion.