Wall Street and European stocks were lower as oil once again touched a new record high and copper fell sharply.
Wall Street was down 153 points on the Dow, or 1.3% while Nasdaq and the Standard & Poor’s 500 were off a bit more.
Fears about the impact of rising oil prices, inflation, the health of major financials, such as broker Bear Stearns which denied it had liquidity problems, and worries about the credit markets, drove the fall once again.
Our market is looking at a 1% plus fall this morning,judging by the futures market.
Another Wall Street broker, Lehman Bros, revealed plans to cut 5% of staff, or 1400 jobs across the entire company and the Blackstone buyout group fell as its first earnings report produced a disappointing 28% fall in profit.
European stocks fell to the lowest level since June 2006 as mounting concern the US is slipping into recession sent commodities producers lower and investors speculated Bear Stearns Cos. lacks enough access to capital.
The Dow Jones Stoxx 600 Index lost 1.2%. The measure of major European shares has fallen 17% so far this year on concern the collapse of U.S. subprime mortgages and a US recession will cut profit growth.
Major national markets fell in all 17 western European countries.
London’s FTSE 100 lost 1.2% to a seven week low; France’s CAC 40 slipped 1.1% and Germany’s DAX fell 1%. The Euro Stoxx 50, a measure for the euro region, fell 0.9%.
BHP, Rio Tinto fell, continuing their Australian weakness as LME three month copper slid as much as 3.2% in London. Nickel, lead, tin and zinc prices also fell. That will hurt the Australian resources sector.
New York oil high a high of $US108.17 before slipping back under $US108 a barrel.
New York copper shed 12 US cents a pound in a big fall to $US3.7950.
However gold fell to $US971.80.
Asian stocks fell to a seven-week low, led by Japanese shares where the Nikkei hit a two year low, while in Australia, the market touched a 2008 low.
Malaysia fell the most it has for a decade with Kuala Lumpur’s key index off 11% after the ruling national front lost ground heavily to a newly formed opposition group, but retained power.
The MSCI Asia Pacific Index fell 1.7%, the lowest since January 22. The index is now off 13% so far this year amid fears of mounting credit-market losses and a US recession that have wiped up to $US5 trillion from global stock markets.
The Nikkei fell a sharp 2% to 12,532.13, while China’s CSI 300 Index slumped 4.1% to a seven-month low. All regional markets retreated apart from Hong Kong and Sri Lanka.
The Nikkei fell to its lowest level in more than two years on the poor US jobs news and the strengthening yen again raised doubts about corporate profits, especially in the export sector.
It was the lowest close for the Nikkei since September 2005.
In Australia, BHP Billiton dropped a large 4.1% $37.30, the most since early last month, the day of its interim earnings report on February 6 and the formalisation of its bid for Rio Tinto.
Rio fell 3.6% $126.48.That is right on the valuation of BHP’s 3.4 shares for one offer.
The Kuala Lumpur Composite Index fell 11%, the most since September 1998, at the height of the Asian financial crisis.
The plunge triggered trading curbs as investors sold off the market in reaction to the weekend election result.
Here while BHP and Rio were major losers, it was a bad day overall for the market which can’t seem to escape investor concerns over banks, bad debts, poor property deals and just plain worries about anything.
The ASX 200 fell 83.60, or 1.6%, to 5,180.40 at the close it’s weakest since October 4, 2006. That was after last week’s nasty 5.5% fall, the worst for 20 years.
The All Ordinaries Index lost 1.7% to 5,275.80, but closed above its 2002 low after flirting with it earlier in the day.
ABC Learning Centres ended 8 cents or 4.5% higher at $1.55; Allco Finance Group lost another 6 cents or 11% on more bad news about debts and asset sales. It ended at 47 cents.
Babcock and Brown Power rose 9 cents, or 6%, to $1.60, recovering a bit of last week’s 27% loss.
Contractor and builder, Leighton Holdings dropped a large $3.88, or 8.7%, to $40.63, its biggest fall since in almost four years.
Zinc hopeful Herald Resources fell 7c to $2.64 as it backed a $505 million takeover bid by a consortium led by Chinese and Indonesian interests; Woodside Petroleum was steady at $56.50 and Santos rose a cent to $12.41 as the oil price remained at near record levels.
Among the banks, the CBA fell 65 cents to $38.70 as it lifted its standard variable home loan rate by 0.35%, the National shed another 43 cents to $26.50, Westpac lost 12 cents to $21.02, and ANZ fell under $20, dropping 27 cents to $19.99.
Babcock & Brown Ltd lost 16 cents to $13.80 as it retired $250 million in short-term margin loans secured against its managed funds so far this calendar year. Macquarie Bank finished higher on the day.
And Telstra fell seven cents to $4.30 while its installment receipts lost six cents to $2.71.
