Is it Bear Time? (22-01-2008)

The past two days have been days of turmoil created in global equity markets by the sharp declines seen in Asia and Europe. Asian Markets slumped on Monday and plummeted on renewed U.S. recession fears today with massive losses.

Among losing sectors, financials were under great pressure across the region. In Tokyo, shares of Mitsubishi UGJ lost 5.88%, those of Mizuho Financial Group plunged by 8.2%, and Chuo Mitsui sank by 10.13%. In Sydney, Macquarie Group plummeted by 11.4% and Kookmin Bank shares dropping 3.1% in Seoul.

In Japan, the central bank decided unanimously to keep kept interest rates unchanged.

European shares opened with heavy losses but recovered by mid-morning and have been trading in a narrow range since, buoyed by rumors that central banks are going to join forces in cutting interest rates, something that has not been confirmed.

The financials sector that had been under pressure earlier turned up and French banks Societe Generale and BNP went into positive territory supporting the sector.

All news agencies are estimating that Wall Street is going to open sharply down, with futures pointing into negative territory, though not as sharply as they have been in the past 24 hours. What will happen remains to be seen.

Source: ISFM