World stocks shud­der as econ­omy jit­ters take cen­ter stage

The Pak Banker - - MARKETS/SPORTS -

Stocks shud­dered again Thurs­day, led by a sharp drop in Hong Kong as it caught up with global mar­ket tur­moil af­ter Lu­nar New Year hol­i­days. An es­ca­la­tion in ten­sions be­tween North and South Korea added to a litany of woes for mar­kets that were al­ready flus­tered by signs of slow­ing global growth and the slide in oil prices.

France's CAC 40 slid 3.5 per­cent to 3,920.77 and Ger­many's DAX dropped 2.7 per­cent to 8,774.59. Bri­tain's FTSE 100 shed 2.3 per­cent to 5,541.02. Fu­tures au­gured sharp losses on Wall Street. Dow fu­tures sank 1.6 per­cent to 15,617.00 and S&P 500 fu­tures fell 1.6 per­cent to 1,817.00. The dol­lar lost 1.8 per­cent against the Ja­panese yen.

"What started in Jan­uary as mainly China based wor­ries has clearly broad­ened back out to con­cerns about global growth," said Shane Oliver, chief econ­o­mist at AMP Cap­i­tal in Syd­ney. He said five fault lines are driv­ing con­cerns about the global econ­omy: the malaise in emerg­ing mar­kets, the on­go­ing con­cerns about wan­ing growth China, the col­lapse in oil prices, the strong dol­lar and fears that the global econ­omy could plunge into a re­ces­sion be­cause of fi­nan­cial mar­ket tur­moil. North Korea on Thurs­day vowed to im­me­di­ately de­port all South Korean na­tion­als and freeze all South Korean as­sets at a jointly run fac­tory park in the North, an ag­gres­sive re­sponse to the South Korean de­ci­sion to sus­pend op­er­a­tions at the com­plex in re­sponse to the North's mis­sile and nu­clear tests. The Korean penin­sula is a po­ten­tial flash­point for the U.S. and China. Wash­ing­ton is an ally of South Korea and Bei­jing is the main backer of North Korea.

Hong Kong's Hang Seng dived 3.9 per­cent to 18,545.80 af­ter open­ing as much as 5 per­cent lower. South Korea's Kospi staged its big­gest daily drop in nearly four years, down 2.9 per­cent to fin­ish at 1,861.54. The Hong Kong and South Korean mar­kets opened for the first time this week af­ter Lu­nar New Year hol­i­days. China and Tai­wan will re­open on Mon­day. Ja­pan was closed Thurs­day for a sep­a­rate pub­lic hol­i­day. Aus­tralia's S&P/ASX 200 was up 1 per­cent to 4,821.10. Sin­ga­pore, Thai­land, In­dia and New Zealand fell while bench­marks in the Philip­pines and In­done­sia rose. Fed­eral Re­serve Chair Janet Yellen of­fered no ma­jor sur­prises in pre­pared re­marks re­leased be­fore the start of her two-day Con­gres­sional tes­ti­mony.

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