Further falls in global stocks

Source: Stock Market Digital

Date :29/08/2007 08:44:25

Asian stocks have fallen sharply in Wednesday trading, with overnight declines in the US as housing market and credit concerns continue.

Japan's Nikkei index lost 275 points or 1.7 percent, to close at 16,013. Wall Street's Dow Jones had earlier finished Tuesday down 280 points or 2.1 percent to 13,042.

The latest share falls followed a warning from Merrill Lynch that the credit squeeze will hurt bank profits.

The brokerage downgraded opinion of stocks in three firms exposed to the sub-prime sector - Bear Stearns, Lehman Brothers and Citigroup.

Investor confidence was also hit by weak US consumer sentiment figures.

The mood of global investors has been further hit by released minutes of the most recent meeting of the Federal Reserve, which suggested a US interest rate cut might not be imminent.

The minutes showed that while the committee's members realised that the problems in the financial markets might need a policy response, they did not act at the start of this month because they were keeping their focus on inflation.

The sub-prime mortgage sector gives higher risk loans to people with poor credit histories.

Sub-prime default levels have risen to record highs in the US over the past year in the face of higher mortgage rates, raising fears that this could hamper credit availability in the broader global market.

August 29 2007