28 May 2009

Mixed day on markets

8:03 pm on 28 May 2009

Markets around the world were mixed in the day's trading, with the US, Australia and New Zealand down but European and Japanese equities up.

US stocks fell on Wednesday, reversing a more than 2% rally in stocks the day before.

Rising yields on US Government debt sparked worries about how borrowing costs could be affected.

Investors fear that if yields rise substantially, it will increase the cost of borrowing for consumers and corporations, hurting economic activity.

Shares of General Motors were down 18% to $US1.18 as the car maker faced a failed debt exchange, setting the stage for a bankruptcy filing expected by the end of the month.

The Dow Jones industrial average dropped 109.51 points, or 1.29%, to 8,363.98. It was weighed by declines in shares of International Business Machines and 3M Co.

The Standard & Poor's 500 Index fell 9.94 points, or 1.09%, to 900.39.

The Nasdaq Composite Index lost 8.21 points, or 0.47%, to 1,742.22.

Europe stocks up again

European equities finished higher for a third straight session, boosted by financial and retail shares.

There are hopes the market has seen its worst for the year and is on track for a recovery.

The FTSEurofirst 300 of top European shares ended 0.6% higher at 870.63 points. The index, which slumped 45% in 2008, has gained in eight of the past 10 sessions.

Minute gain for Nikkei

The Nikkei average edged up 0.1% on Thursday, with exporters such as Toyota Motor Corp buoyed by hopes that Japan's economy may have seen its worst phase.

But gains were capped by the previous day's climb in US Treasury yields, which fuelled concern over rising corporate borrowing costs, and by caution over the possible bankruptcy of car maker General Motors.

The Nikkei rose 12.62 points to 9,451.39 after a slight drop earlier in the day. The broader Topix gained 0.3% to 895.59.

1% drop for Australia

The Australian share market closed more than 1% lower amid broad-based selling following the poor lead from Wall Street.

The benchmark S&P/ASX200 index was 45.4 points, or 1.19% lower at 3755.7, while the broader All Ordinaries fell 41.4 points, or 1.09%, to 3753.9.

NZ stocks almost 2% down

The NZX 50 closed down 48 points, or 1.7% on Thursday, to 2721 on turnover of $95 million.

Telecom closed down 9 cents to $2.52, Contact Energy down 13 cents to $5.72, Fletcher Building down 10 cents to $6.30, Fisher and Paykel Appliances up 3 cents to $1.06 and Mainfreight down 31 cents to $4.59.