Global Shares Plummet on Gloomy Data - Download Free Phim, Nhac, Phan Mem, Karaoke

conmeo · #1 (**permalink**) 10-24-2008, 06:02 AM

PARIS — Stocks plummeted worldwide on Friday, with severe declines in Europe and Asia propelled by dismal corporate earnings and economic data pointing to a profound global slowdown.

The turmoil in the markets threatened to spill over to Wall Street as futures contracts on the Dow Jones Industrial Average and the Standard & Poor’s 500 Index fell to their lowest permissible levels before the start of official trading in the United States.

The futures declines indicated a steep fall in American stock prices when trading opens in New York.

Europe’s major exchanges opened with falls of around 5 percent that turned quickly into a rout. By mid-day, the FTSE 100 in London slipped by 8.8 percent, the CAC 40 in Paris was down 10.15 percent and in Frankfurt the DAX lost 9.96 percent.

Europe’s troubles are being fueled by worries over looming economic disruption following the financial market meltdown. Investors are worried that a radical slowdown will harm companies’ profitability more than previously feared. Falls on the London stock exchange were led by declines in banking, airline and mining shares. In Paris, Air France warned of lower profits, sending its shares down by almost 10 percent.

In Britain, data released on Friday showed that economic output shrank for the first time in 16 years by 0.5 percent between July and September, according to the Office for National Statistics. Britain is the first of the seven most-developed industrialized nations to publish economic data for the quarter and some economists said they expect the other nations to also report that gross domestic product shrank.

“This is going to be a long-drawn-out downturn of about 5 quarters of negative growth and there will be very few major economies that will escape recession,” said James Knightley, an economist at ING Financial Markets in London. “With asset values falling, real incomes down and corporate profits declining we can see a real drop in investments and the government is in no position to help.”

The services sector, which accounts for 75 percent of Britain’s economy, shrank 0.4 percent in the quarter from the second quarter and business services and finance output contracted 0.4 percent, the Office for National Statistics said.

The figures confirmed comments earlier this week by Prime Minister Gordon Brown and Bank of England governor Mervyn King that a recession is likely. The National Institute of Economic and Social Research said on Wednesday that Britain’s economy would suffer more than other major industrialized countries because of a combination of rising household and public debt, a sharp fall in consumer spending and decline in house prices.

Stuart Thomson, investment manager at Resolution Asset Management in Glasgow, said the British economy could face as much as 3 years of recession. “It’s a global phenomenon and that makes it worse,” said Mr. Thomson.

Concerns over the likely slowdown have more than halved crude oil prices since July. Prices slipped further early on Friday to less than $63 a barrel, despite a decision by OPEC to cut production by at least 1.5 million barrels per day. While the yen continued to strengthen, the dollar touched a five-year high against the British pound at $1.5834 and a two-year high against the euro of $1.2666.

In Japan, the Nikkei 225 index plunged 9.6 percent, hitting its lowest level since April 2003. The Kospi in South Korea plummeted 10.6 percent, falling 1,000 points and heading for a total decline this year of more than 50 percent.

The Straits Times index in Singapore hit a four-year low, down 4.8 percent. The Hang Seng in Hong Kong dropped 8.3 percent and Taiwan closed down 3.1 percent.

The sell-off came as the yen reached a 13-year high of 95.35 against the dollar, and after electronics and consumer goods giants Sony and Samsung Electronics painted a grim picture of future corporate earnings as nervous consumers were expected to rein in discretionary spending.

Sony, which is suffering an added burden from the strong yen, shocked investors with a sharp reduction in its full-year earnings forecast after the close of trade in Japan on Thursday.

The stock was punished on Friday, plunging 14 percent to a 13-year low. Sony, which cited "a deterioration in the market environment brought on by the slowing global economy and an intensification of price competition," is heavily reliant on export markets in the United States and Europe and has seen its goods become more expensive to consumers there, thanks to the appreciation of the Japanese currency in recent months.

The scene in the South Korean stock market was similar on Friday, when Samsung reported a 44 percent fall in third-quarter earnings. Although this was in line with analysts’ expectations, the results highlighted the tough conditions in the technology and memory chips sector and helped push down the beleaguered Kospi below the 1,000-point mark.

The latest company results show the extent to which slowing consumer and corporate spending is hitting the export-led economies of the Asia-Pacific region.

Third-quarter growth figures from Japan, due next month, are expected to confirm that the country is in a recession, while the latest data from South Korea on Friday showed that economic growth slowed to 0.6 percent in the third quarter, down from 0.8 percent growth during the previous three months.

This follows disappointing growth figures earlier this week from China, showing the country’s once-blistering pace of expansion had slowed to 9 percent during the third quarter.

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