12 Aug 2010

World stocks fall

9:00 am on 12 August 2010

Global sharemarkets have tumbled as investors worry about the health of the US economy after the Federal Reserve lowered its outlook for the recovery.

On Wall Street, a broad sell-off has erased the year's gains.

The US trade deficit widened by 18.8% in June on a surge of consumer goods from China and other suppliers, while US exports fell.

Commodity prices also have fallen.

The Dow Jones Index on Wednesday closed down 265 points, or 2.5%, at 10,378.

The Nasdaq Composite closed down 68 points, or 3%, at 2208.

In Europe, the FTSE 100 in London, the DAX in Frankfurt and the CAC-40 in Paris declined by 2.1% - 2.7%. Financial stocks were among the top losers.

Earlier, the Nikkei in Tokyo ended on 9,292, down 258 points. The Hang Seng in Hong Kong finished on 21,294, down 179 points.

On Tuesday, the Fed Reserve said it would maintain its efforts to try to bolster the economy amid signs the recovery was weaker than expected.

The Australian 200 Index closed down 85 points, to 4455.

The NZX 50 closed down 9 points, at 3036 on turnover of $44 million.

The New Zealand dollar went below the 72 US cent mark on Wednesday night.

By 8.10am on Thursday, it was trading at 71.60 US cents, 79.72 Australian cents, 45.70 pence, 61.12 yen and 0.5563 euro. The Trade Weighted Index was at 66.75.

Brent crude oil was trading at $US78.48 per barrel and gold was trading at $US1196.95 per ounce.