Another tough week begins (28-01-2008)

Asian markets tumbled on Monday as concerns have been growing regarding a slow down of both the U.S. and the Japanese economies. The Shanghai Composite plunged 7.19% to 4,419.29 in China, while Japan's Nikkei 225 Stock Average lost 4 percent to 13,087.91. Hong Kong's Hang Seng Index was tumbling by 6 percent in afternoon trade but eventually recovered to close down by 4.25% at 24,053.61.

European indices have also been in negative territory since opening, reflecting the sentiment seen in Asia overnight and on Wall Street last Friday. Recession fears were putting pressure on markets that are also awaiting the result of the Fed’s meeting regarding any more interest rate cuts. This time it is a two day meeting and the results are expected on Wednesday. Financials were leading losses here as investors are still reeling from the shocking disclosure last week of massive losses at Societe Gιnιrale. The one shining exception was Fortis, after is vehemently denied rumors of big subprime-related losses.

Back on Wall Street, futures have been firmly in negative territory, indicating another tough session as here too, as global equities continue to sell off due to concerns that there may be more massive write-downs by global banks for subprime loan losses and investors await the result of the Fed meeting, especially since rate-cut expectations have diminished after it became known that Societe Gιnιrale had been forced to liquidate European equity index futures to close out the position of rogue trader Jerome Kerviel.

Source: ISFM