Jun 30, 2010

Telegraph:: Finance.- FTSE 100 marks time after global stock Market Rout

FTSE 100 marks time after global stock market rout

London's index of leading shares opened up 0.2pc but remained below the psychologically important 5,000 level.
Banks shares were under pressure ahead of today's refinancing deadline of the loans provided by the European Central Bank (ECB) during the financial the financial crisis.
Barclays, Lloyds and Royal Bank of Scotland were down between 0.8pc and 1.4pc in early trading, amid concerns that the ECB may be reducing emergency financial support to banks too soon.
Miners remained unsettled by signs that demand for metals and minerals may fall following a sharp drop in US consumer confidence in June, indications of a slowdown in China and Japan, and increasing stress eurozone economies. Karakhmys fell 1.6pc.
In Europe, Germany's DAX and France's CAC edged lower in early trade. On Tuesday the FTSE 100 index dropped 3.1pc to a 10-month low of 4,914.22. France's CAC 40 fell 4pc, Germany's DAX 3.33pc and Madrid's IBEX 35 index 5.5pc.
Earlier on Wednesday, Asian markets fell for a second day in the face of mounting evidence that the recovery from the financial crisis is faltering.
The losses came after Wall Street fell 2.7pc to 9,870.30 overnight with a sharp fall in US consumer confidence in June raising doubts about growth in the world's biggest economy.
Japan's Nikkei 225 stock average shed 189 points - or 1.97pc - to 9,381. Hong Kong's Hang Seng, South Korea's Kospi, and Australia's S&P/ASX 200 fell between 0.6pc and 1.4pc.
China’s stocks fell, sending the benchmark Shanghai Composite index to a 14-month low of 2,395 on concern policy tightening measures and the Europe debt crisis could hit growth. The index has tumbled 23pc this quarter.
Bad economic newsflow from almost every corner of the world has cemented worries that the current strains facing Governments and banks could trigger a re-run of the panic of 2008, with traders selling all but the safest assets and depressing prices internationally.
Investors were faced with a downward revision of the outlook for China's economy by the Conference Board on Tuesday, poor jobs and trade figures from Japan, moves by the European Central Bank to scale back its emergency support for eurozone banks and protests in Greece against austerity measures.
Tuesday's fall in equities coincided with a rush to buy bonds, which pushed the yield on the 10-year Treasury below 3pc, commodity prices, including gold, were depressed.
Royal Bank of Scotland strategist Andrew Roberts said he sensed a "Minsky moment" approaching - the point identified by economist Hyman Minsky when investors start to panic.
"We are seeing a snowball effect of negative news," he said. "It's all rather messy out there. In the last few days there has been a tangible shift from complacency to a realisation that maybe things aren't looking all that good.
"This is almost identical to two years ago – complacency giving way to the abundant risks out here."
David Owen of Jefferies said that concerns over the European withdrawal of its one-year funding remained the most immediate worry
"Banks are facing some €442bn of funding coming off, and the likelihood is that they have to tap the three-month window for a major chunk of that. The fear is that the ECB is trying to wean them off this support at one of the most difficult points."

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