Asian, European Markets Dip
FRANKFURT, Germany (AP) _ Investors pushed European and Asian stock markets down further Monday, betting that an expected U.S. interest rate cut would be too little to protect the world economy from a snowballing slowdown.
Meanwhile, U.S. markets dipped lower after some early gains, though analysts said many investors were remaining on the sideline in advance of the Federal Reserve meeting Tuesday.
``We’ll have a clearer picture tomorrow after seeing what the Fed does,″ said Stefan Reck, a trader with DG Bank in Frankfurt, referring to Tuesday’s expected interest rate cut by the U.S. Federal Reserve. ``All the worry is coming from the U.S. right now.″
After climbing nearly 1 percent in early morning trading, Germany’s Dax index of the country’s 30 biggest companies was down 1.4 percent, or 79.86 points, to 5,654.63, falling below its previous 52-week low of 5,663.54 in late trading.
Technology stocks also fell in London, with Friday’s weakness in U.S. markets filtering through to Energis, which was down 6 percent, and Colt Telecom, down 5.6 percent.
London’s FTSE 100 index closed down 0.12 percent, or 7 points, to 5,555.90 after being ahead for most of the day. And Paris’ CAC-40 also ended trading down 1.18 percent, or 62 points, to 5,044.53.
In the United States, investors pushed the indexes lower after a moderately strong opening that came on the heels of a dismal week. The Dow Jones industrial average suffered its worst-ever weekly point decline last week, falling back below 10,000, while the Nasdaq composite index fell through the 2,000 level to hit a 27-month low.
The Dow was off 7.82 at 9,815.59 in early afternoon trading.
Broader stock indicators also fell. The Standard & Poor’s 500 index was off 1.79 at 1,148.74, and the Nasdaq was off 20.26 at 1,870.65.
Still, overall trading seemed tame compared in comparison with last week, but traders warned that investors were still unconvinced that Wall Street’s wild ride was over.
Many had already priced in an interest rate cut by the Federal Reserve this week and thought that the expected rate would do little to turn markets around, said Katrin Glaeser, a trader with BHF Bank in Frankfurt.
``The market’s totally unstable right now. A lot of people already think the bad news is already out there, but every week a company says it’s going to lower their earnings forecast,″ Glaeser said.
``There’s no good news now that’s going to push markets up.″
The indecision was evident in Japan, where the Nikkei Stock Average of 225 opened lower, rose 2 percent, then ended the day down 42.01 points, or 0.34 percent, at 12,190.97.
Last week, the Nikkei fell more than 3 percent, hitting a new 16-year low, as the government acknowledged that the country’s economic outlook was deteriorating.
After the Tokyo stock market closed, the Bank of Japan announced that it would increase money supply at commercial banks in an effort to slow the country’s growing financial crisis.
The BOJ policy board, which had been expected to cut a key interest rate to zero, said its move would have the same effect. The BOJ had targeted the rate at zero for 18 months before nudging it up to 0.25 percent in August.
Elsewhere in Asia, the blue chip Hang Seng stock Index in Hong Kong slipped 64.35 points, or 0.47 percent, finishing at 13,457.69, and Singapore’s benchmark Straits Times index fell 49.95 points, or 2.8 percent, to 1,722.15. In Singapore, traders blamed Wall Street’s losses.