Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

World

Stocks rise despite grim news

WASHINGTON, November 28 – Stimulus efforts to stave off a global recession steadied world stock markets on Thursday, but grim outlooks in China, Japan and elsewhere indicate the economic crisis still had a long way to run.

With stock markets in the United States closed for the Thanksgiving holiday, London and other markets rallied one day after the EU unveiled a 200-billion-euro (260 billion dollar) stimulus package and China announced its biggest interest rate cut in a decade.

Figures from Japan, Asia\’s biggest economy, out Friday showed that industrial production slumped 3.1 percent in October from the previous month and consumer spending dropped 3.8 percent in October from a year earlier.

Yet Japanese unemployment unexpectedly dropped to 3.7 percent in October from 4.0 percent in September, and Japan\’s core inflation slowed to 1.9 percent in October as energy costs cooled and domestic demand weakened amid the recession.

China\’s top planning minister, Zhang Ping, said Thursday his country\’s economy slowed further in November, and warned of the dangers of mass unemployment and social unrest.

Elsewhere, Spain on Thursday became the latest major economic power to unveil a stimulus plan, pledging 11 billion euros (14.3 billion dollars) for infrastructure projects.

Companies worldwide delivered a storm of job cuts and profit warnings.

GM Europe boss Carl-Peter Forster wrote to staff telling them that the troubled US auto manufacturer needed to cut European costs aggressively if it was to survive as vehicle markets slump.

A survey in Europe showed that, with so much bad news around, consumers and businesses were losing confidence — which threatens to reinforce the already gloomy economic conditions.

Advertisement. Scroll to continue reading.

Consumer and business confidence in the European Union slumped in November to the lowest level in 23 years in the face of the looming recession, according to the European Commission\’s EU economic sentiment indicator.

Markets pinned hopes on steps by policy makers to revitalize the world economy in the face of the worst financial crisis since the Great Depression.

The US Federal Reserve announced Tuesday it would buy up to 600 billion dollars in mortgage securities, with another 200 billion dollars allocated for asset-backed securities to help get credit flowing again to consumers.

The head of the Davos economic forum, Klaus Schwab, said Thursday that the crisis had cost five trillion dollars as he announced a record presence of world leaders at the conference in January.

In early Friday trading in Asia, Taiwan share prices opened down 0.21 percent, South Korean shares opened marginally higher following three consecutive sessions of gains, and Japan\’s Nikkei stock index moved in a narrow range after opening 0.32 percent higher, as investors were cautious in the absence of a lead from Wall Street, dealers said.

Australian shares rose 1.0 percent in early trade, tracking European markets upwards in the absence of a lead from Wall Street.

In Europe on Thursday, London shares gained 1.77 percent, Paris added 2.54 percent and Frankfurt rose 2.3 percent.

In Latin America, markets were mostly up Thursday on light trading due to the US holiday.

The Ibovespa stock market in Brazil, the largest in the region, was down 0.7 percent after three straight days of gains.

Advertisement. Scroll to continue reading.

The IPSA index at the Santiago Bolsa de Comercio was up 0.4 percent, while the Bolsa de Valores in Mexico City was up 0.88 percent and the Merval index on the Buenos Aires stock market closed up 1.8 percent.

Share prices also got support from hopes of steps by US president-elect Barack Obama to shore up the US economy, dealers said, as US data suggested the world\’s biggest economy was sliding into a deep recession.

US consumer spending dropped 1.0 percent in October, the steepest fall since September 2001, while key durable goods orders plunged 6.2 percent and weekly jobless claims rose to a fresh 16-year high.

Against the tide of gloom, researchers at UBS bank said that some plunging industrial forecasts in Europe were heading for a gradual recovery.

"We … expect surveys to bottom out during the next few months," they wrote in a report.

In Canada, spending cuts could lead to a new government: Finance Minister Jim Flaherty on Thursday announced the elimination of a 30 million-dollar annual taxpayer subsidy for politicians and political parties, effective on April 1, 2009.

The subsidy accounts for up to two thirds of the revenues the country\’s opposition parties — and they quickly said they would vote against the measure, which could lead to the second snap elections in two months.

Canada expects to continue posting budget surpluses in the coming years, despite a slowing economy and the possibility the country is now in a recession, Flaherty said.

Advertisement. Scroll to continue reading.
Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...