World stocks fall on Korea clash, Europe debt woes | business | Hindustan Times
Today in New Delhi, India
Dec 09, 2016-Friday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

World stocks fall on Korea clash, Europe debt woes

business Updated: Nov 23, 2010 14:18 IST

AP
Highlight Story

World markets slid on Tuesday as investors fretted Ireland's debt crisis will spread to other financially weak European countries and Asian stocks took an extra hit from news that North Korea had fired dozens of artillery rounds into rival South Korea's territory.

In early European trade, Britain's FTSE 100 was down 0.9% at 5,680.83 and Germany's DAX slipped 0.3% to 6,822.05. France's CAC-40 shed 0.4% to 3,788.80. Wall Street was set to fall with Dow futures off 89 points, or 0.8%, at 11,076.00. Initial relief that Ireland had relented and asked for European Union and International Monetary Fund (IMF) help to bailout its heavily indebted banks was shortlived. Experts said the bailout - the total amount of which is still being decided - would do little to shield other heavily indebted countries from a potential collapse in investor confidence, most immediately Portugal but also potentially Spain, Italy and Greece.

North Korea's attack on neighboring South Korea added to losses in the Asian stock markets still open when news broke of the latest escalation in tensions.

The North shot dozens of rounds of artillery onto a populated South Korean island near their disputed border, prompting South Korea to return fire and scramble fighter jets, military officials said. At least one South Korean marine reportedly was killed. Hong Kong's Hang Seng index tumbled 2.7% to 22,896.14 and India's Sensex was down 2.1% at 19,548.51. Singapore's index lost 1.6% to 19,548.51.

South Korea's Kospi, already closed for the day when news of the attack came out, lost 0.8% to 1,928.94. Japan's markets were shut for a national holiday. China's Shanghai Composite Index shed 1.9% to 2,828.28 with sentiment hurt by expectations Beijing will take more steps to cool inflation that could slow economic growth.

On Monday in New York, stocks were muted because of the European debt crisis as well as an expanding probe into insider trading. The Dow Jones industrial average fell 24.97 points, 0.2%, to 11,178.58.

There are doubts Ireland's government will survive long enough to secure parliamentary approval for a budget that will include multibillion dollar spending cuts as a condition of the outside assistance.

"The euro debt crisis will provide an excuse for investors to stay on the sidelines for the time being," said Ben Kwong Man Bun, the chief operating officer at KGI Securities in Hong Kong. "The debt crisis will put pressure on the euro and keep the US dollar stronger, and that will put pressure on equity markets." Ireland's rescue plan comes after a Greek bailout in May and is the European Union's latest attempt to win back market confidence and keep its 16-nation euro currency strong and stable. But the cost, both monetary and political, keeps rising by the day. Analysts say Irish Prime Minister Brian Cowen faces a tough battle just to clear the first hurdle of the budget process on Dec. 7, when spending cuts will be unveiled and face an initial vote. In currencies, the euro fell to $1.3558 from $1.3625 late Monday. The dollar rose to 83.68 yen from 83.28 yen.

Benchmark oil for January delivery was down 63 cents to $81.11 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 24 cents to settle at $81.74 on Monday.