 Stocks slide on oil, global slowdown worries
(China Daily)
Updated: 2008-07-02 07:47 Stocks fell in Europe and Asia, extending the MSCI World Index's worst first half in a quarter century, as higher oil and reports on housing and manufacturing suggested the global economy will slow. US index futures slid. Porsche SE, the maker of the 911 sports car, Ford Motor Co. and Ryanair Holdings Plc retreated in Europe as oil traded above $142 a barrel. Royal Bank of Scotland Group Plc and Sumitomo Mitsui Financial Group Inc led financial shares lower after UK housing prices sank the most since the last recession and Japanese business confidence fell. The MSCI World lost 0.6 percent to 1,393.14 at 11:27 am in London. Futures on the Standard & Poor's 500 Index fell 1 percent before a report that may show manufacturing contracted. "The bad news keeps coming," said Benoit de Broissia, an analyst at Richelieu Finance in Paris, which oversees $6.2 billion. "The economy remains uncertain with a high oil price and inflation. The ensemble of elements is adverse." MSCI slides The MSCI World slid 12 percent in the first half, the most since 1982. Financial stocks from HBOS Plc to Lehman Brothers Holdings Inc and Babcock & Brown Ltd led declines that erased more than $9.2 trillion from equity markets worldwide this year as $400 billion in credit-related losses and oil at all-time highs offset efforts by central banks to bolster confidence in financial markets. "Improvement in the US economy is slow - slower than we thought," Jean-Paul Pierret, a strategist at Dexia Securities France in Paris, said. "Higher oil is a hardship for the consumer and it's difficult for companies to pass on costs. The situation isn't easy." Europe's Dow Jones Stoxx 600 Index declined 2.3 percent, extending its worst first-half performance since at least 1987. The MSCI Asia Pacific Index slipped 0.5 percent. "If you are already invested, you sit tight," Howard Wheeldon, senior strategist at BGC Partners LP in London, said. "Inflation is going to be with us for a long time to come. It's going to be very, very difficult." Porsche sank 5.6 percent to 92.45 euros, and Ryanair fell 3.9 percent to 2.69 euros. Oil rises Oil rose, extending this year's 48 percent gain, after ABC News reported Israel is increasingly likely to attack Iran this year, starting a conflict that would threaten supplies from the Middle East. Crude oil for August delivery rose as much as $2.73, or 2 percent, to $142.73 a barrel in electronic trading on the New York Mercantile Exchange. It was at $142.35 a barrel at 12:09 pm London time On Monday, it touched a record $143.67 before retreating to settle 21 cents lower at $140 a barrel. The price climbed 38 percent between April and June, the biggest quarterly increase in nine years. Agencies (China Daily 07/02/2008 page16) |
