world stock market news

World stocks fall on euro debt, growth fears

Global stock markets reeled Tuesday amid growing fears the European debt crisis threatens a return to recession and a spike in dangerous tensions between North and South Korea.

Investors, rocked by fresh turmoil in the Spanish banking sector, were also hit by the prospect of severe austerity measures in the eurozone that could slam the brakes on the fragile global economic recovery.

Reflecting the growing tensions, rates for money lent between commercial banks pushed higher, stoking worries there could be a repeat of the credit crunch of 2008 sparked by the collapse of US investment bank Lehman Brothers.

Investors meanwhile were buying safety — the dollar and US government bonds — in the hope of riding out a storm which has been building for months as first Greece and then other weaker eurozone states got into difficulty.

After heavy losses in Asia and Europe, US stock markets recovered from some of the damage inflicted early in the session.

The blue-chip Dow Jones Industrial Average recouped losses of over 250 points to finish just above the symbolic 10,000-point mark, but still in the red.

The Dow dropped 22.82 points (0.23 percent) to 10,043.75 while the broad-based S&P 500 staged a dramatic comeback, closing 0.38 points or 0.04 percent higher at 1,074.03.

Wall Street “again took its cues from overseas today, with the Korean peninsula and the eurozone sharing the global spotlight,” said Andrea Kramer of Schaeffers Investment Research.

“A valiant eleventh-hour blitz by the bulls kept the Dow Jones Industrial Average atop round-number support, and put the S&P 500 Index just north of breakeven.”

At one point all 30 of the Dow’s stocks had been down, with shares in consumer and financial firms hit hardest.

But amid the turmoil, news that US consumer confidence — a key component for any economic recovery — improved for the third straight month in May provided a boost.

Still, the US rally game too late to nudge up European markets.

“Investors continued to flee risky asset classes on Tuesday… causing European indices to slump,” said City Index analyst Joshua Raymond.

Michael Hewson, analyst at CMC Markets, said there were “increased fears about the stability of the European banking system and the financial viability of sovereign governments.

“Bank borrowing costs… have risen to their highest levels since July last year on concerns about the integrity of the European banking system,” he said, adding that markets were now worried about a double-dip recession.

In Europe, London’s benchmark FTSE 100 index of leading shares slumped 2.54 percent. In Paris, the CAC 40 fell 2.90 percent and in Frankfurt the DAX lost 2.34 percent.

Other European markets fared even worse, with Madrid down 3.05 percent and Milan losing 3.40 percent but these two markets were well off their early lows.

Meanwhile, the European single currency stood at 1.2351 dollars in late New York trade, coming off an early low of 1.2178 dollars in London trade.

In Asian trade earlier Tuesday, stocks were hit by reports that North Korea was on combat alert after it was blamed for the sinking of a South Korean ship in March.

Tokyo lost 3.06 percent, hitting its lowest level since November 30, Hong Kong dropped 3.47 percent and Shanghai shed 1.90 percent.

“The bloodbath continues on equity markets as a heightened sense of concern creeps back in to traders’ minds,” said ODL Securities analyst Owen Ireland.

singapore stock news, singapore stock

Asian stock markets advanced Thursday after Spain’s deficit reduction plan eased worries about Europe’s debt mountain and good economic news sent U.S. stocks sharply higher.

Japan’s benchmark Nikkei 225 stock average rose 1.6 percent to 10,556.78. Solid corporate earnings results also boosted sentiment in Tokyo.

South Korea’s Kospi gained 1.4 percent to 1,686.28 and Hong Kong’s Hang Seng added 0.4 percent to 20,289.18. Australia’s S&P/ASX 200 index was up 1.2 percent at 4,625.40 and benchmarks in mainland China, Singapore and Taiwan also climbed.

The Asian rally followed a big day on Wall Street, where the Dow Jones industrial average climbed 148.65 points, or 1.4 percent, to 10,896.91 _ the highest level since May 4.

Spain announced a plan Wednesday to cut its big deficit, and analysts say the market’s rebound from last week’s drop reflects growing confidence that Europe’s debt problems are contained for now. Economic reports from the U.S. and Europe also helped reassure markets that the global recovery is intact.

Investors moved into tech stocks ahead of earnings from network gear maker Cisco Systems Inc. and following upbeat forecasts from Intel Corp. and IBM Corp.

The tech buying extended to Asia, boosting shares of South Korean chip makers. Samsung Electronics Co. jumped 2.4 percent, while Hynix Semiconductor Inc. surged 3.5 percent. Advantest Corp., a Japanese maker of memory chip testers, shot up 3.2 percent.

Sony Corp. added nearly 3 percent ahead of its annual earnings release later Thursday. The Japanese electronics and entertainment company is expected to book a far smaller net loss for last fiscal year through March 31.

The Standard & Poor’s 500 index rose 1.4 percent to 1,171.67 on Wednesday while the Nasdaq rose 2.1 percent to 2,425.02.

Benchmark crude for June delivery was down 7 cents at $75.58 in electronic trading on the New York Mercantile Exchange, extending the previous day’s big drop after the International Energy Agency said global oil demand is expected to rise less than previously expected in 2010.

In currencies, the dollar fell to 93.16 yen from 93.21 yen. The euro edged up to $1.2650 from $1.2628 late Wednesday.

The last few months have been interesting to say the least. Some got it right from day one - they piled into the share market on March 6 whilst others have dabbled along the way. And we all have views about ‘what might have been’.

Regardless of your view and whether you have been on board or not, perhaps there is maybe some room for some tiny consensus. Is there room for one last flutter?

click to enlarge

What we have seen is a textbook wave four dip. It was only a few percent retreat and not the 10% we ideally like to see in a ‘pullback’. Nevertheless it had the characteristics of a pause before the next move higher. Or so it seems.

The only niggling aspect however was that the oscillator went below zero. In the ideal world we do not like to see that. And in my experience the best stocks or markets to chase are those where the pullback is to about zero and sort of stops there. The reason being this indicates that there has not been excessive profit taking. Little profit taking indicates there is still strong support for the stock.

But we can see that in the last several months the market took off despite the deep oscillator.

If we use a 10, 70 oscillator we can see they held at zero this month and back in late July:

click to enlarge

But the choice of oscillator is always a point of conjecture and not one I can cover here and now.

Either way ProfitSource is showing a wave five ahead. The timing and extent of the wave five will depend on the ‘Elliott’ time period we use. I am showing a 120 day period which is a ‘time of best fit’. But I also have the view that being precise about this is not so important. What is important is the broad direction.

We can see there has been some resistance around 4860 and we may see the market struggle around these levels. In fact, we have seen some nervousness in the last couple of days – as at November 18.

I expect that once past 4860 we will see the market head higher – even over a period of many weeks. Not all stocks however will move higher and as per usual stock selection will be paramount.

In my view this will be the last hurrah before we see the market soften and head south.