Stocks Gain in Europe, but Asian Shares Are Mixed - Download Free Phim, Nhac, Phan Mem, Karaoke

conmeo · #1 (**permalink**) 10-09-2008, 07:44 AM

PARIS — Stocks gained Thursday in Europe, a day after world central banks joined in coordinated action to cut borrowing costs, but Asian markets were mixed and investors said credit remained hard to come by.

“We’re getting a relief rally,” said Howard Wheeldon, senior strategist at BGC Partners in London, “one that is very justified considering the declines of the last few weeks. But nothing has changed, all eyes remain on credit market conditions.”

Trading in United States equity futures suggested the Dow would open slightly higher Thursday. Investors got a bit of good news last night when I.B.M. reported earnings that slightly surpassed Wall Street’s expectations. The company said third-quarter net income rose 22 percent, to $2.05 a share, which was 3 cents higher than analysts’ consensus estimate.

Before the markets opened Thursday in New York, the Labor Department reported that initial claims for jobless benefits dropped 20,000 to a seasonally adjusted 478,000, meeting Wall Street expectations.

In European trading, the DJ Euro Stoxx 50 index, a barometer of euro zone blue chips, rose 1.6 percent, while the FTSE 100 index in London rose 1.7 percent. The CAC-40 in Paris rose 2.6 percent, and the DAX in Frankfurt rose 1.8 percent.

A day after interest rate cuts elsewhere in the world, central banks in Taiwan and South Korea both cut their main rates by a quarter point. The Hong Kong Monetary Authority also cut its base rate by a half point to 2 percent.

In Moscow, where Russian equities have been under severe pressure, the Micex exchange initially suspended trading until Monday after stocks rose more than 10 percent at the opening, but then said it would reopen after the market regulator ordered it to do so.

Meanwhile in Iceland, the government seized Kaupthing Bank, the country’s largest lender, effectively completing the nationalization of its banking system.

Bank stocks were among the biggest gainers in Europe. Royal Bank of Scotland rose 18 percent, UBS rose 7.2 percent, Deutsche Bank rose 7.5 percent, and Société Générale rose 5.8 percent.

ArcelorMittal, the world’s biggest steel maker, rose nearly 10 percent in Paris trading after it reaffirmed its earnings outlook.

In Asia, the Nikkei 225 stock average fell 0.5 percent, after a rout Wednesday wiped 9.4 percent off the index.

In Hong Kong, the Hang Seng index was up 3.3 percent, after an 8.2 percent slump Wednesday. The S&P/ASX 200 index in Sydney fell 1.5 percent.

The United States Federal Reserve, the European Central Bank, the Bank of England and other central banks moved Wednesday to jointly cut their benchmark interest rates by half a point, seeking to renew confidence in an increasingly panicked international financial community.

“I’m taking a slightly positive view,” Mr. Wheeldon said. “I think we are well on the way to sorting out the underlying issues in the capital markets.”

In spite of the central bank moves this week, which have included a flood of liquidity into the markets, the strains in the credit market showed little sign of easing.

Banks in Hong Kong left their main lending rates unchanged, even after the central bank’s move, as the rates lenders must pay to borrow in the interbank market remained prohibitive.

The three-month London interbank offered rate, or Libor, for dollars rose 23/100ths of a percent to 4.75 percent, according to the British Banking Association.

The spread, or gap, between the yield on safe three-month United States government securities and the rate that banks charge each other for dollar loans of the same duration rose slightly, to 4.11 percentage points, suggesting banks remain extremely reluctant to lend to one another.

“To see little or no reaction in the fixings is very disappointing and reinforces the fact that Libor is broken and that the transmission mechanism from central banks isn’t working,” Barry Moran, a Dublin-based currency trader at Bank of Ireland, told Bloomberg News. “Things are still very stressed and we don’t know what’s going to fix it in the short term.”

“Lower policy rates did little to diminish market rates and failed to restore confidence in the banking system. In fact, using up of monetary ammunition with such little effect may hurt sentiment by highlighting the severity of the crisis,” said Dariusz Kowalczyk, chief investment strategist at CFC Symour in Hong Kong, in a research note.

“Deep recession in all major developed economies and many others is still looming,” he said. — Asia Pacific is facing sharp growth slowdown as its trade surplus — ex China — has totally disappeared. “At the same time, inflation is peaking or has peaked. Further policy easing is therefore on the cards.”

The euro rose to $1.3755 from $1.3656 late Wednesday in New York, while the British pound rose to $1.7342 from $1.7308. The dollar rose to 101.08 yen from 99.14.

U.S. crude oil for November delivery rose 7 cents to $89.02 a barrel in electronic trading on the New York Mercantile Exchange, as investors paused in a long sell-off that has taken the price down from a record $147.27 a barrel set July 11.

Oil prices were flat on the day, after the recent long fall from the record $147.27 a barrel set July 11. United States crude for November delivery was slightly down at $88.93 a barrel in electronic trading on the New York Mercantile Exchange.

“Be it in November or in December, be it formally or informally, OPEC will need to reduce production not because the price is currently too low but because there is not enough demand,” Olivier Jakob, an oil analyst at Petromatrix in Zug, Switzerland wrote in a note to clients. “The problem facing OPEC is that demand is too poor but crude prices too high, hence the worry that prices catch up to demand before they can act.”

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