Shaky start to trading, more falls in Asia

Source: Stock Market Digital

Date :17/08/2007 08:54:36

European markets had a shaky start to trading this morning, as Tokyo shares extended their losses in late trading.

A recovery on Wall Street saw the Dow Jones claw back more than 300 points of its losses in the last hour of trading.

In early trading, the FTSE 100 was up 0.74 percent, Frankfurt's Dax fell 0.2 percent and the Cac 40 in Paris was up 0.38 percent.

But there were more falls in Asia, as the Bank of Japan pumped funds into the banking system for a second day.

London's FTSE 100 fell 4.1 percent yesterday, cutting almost £60 billion off the value of Britain's top companies.

Tokyo's Nikkei 225 closed down 5.4 percent or 874.8 points at 15,273.7.

It was the index's biggest points decline since April 2000, taking the Nikkei to its lowest level for a year.

In its third intervention of the week. The Bank of Japan injected 1.2 trillion yen ($10.7 billion; £5.4bn) into money markets.

Japanese investors are worried that a slowdown in the US economy will hit exports from Asia.

There is also speculation that the Bank of Japan could raise interest rates next week, despite the problems on the market.

Elsewhere, the Australian central bank intervened to support its currency for the first time for six years.

The Australian dollar was facing its biggest one day fall against the US dollar since it was allowed to trade freely in 1983.

US shares were helped by speculation that Bear Stearns, which is heavily exposed to the troubled mortgage sector, could get funding from a Chinese bank.

The BBC reported that the Federal Reserve could cut interest rates to help support the troubled housing market.

August 17 2007