World stock markets slide as Europe finance jitters offset flurry of corporate deals

Tuesday, September 28, 2010

World markets slide as bank worries offset deals

BANGKOK — World stock markets sank Tuesday as renewed worries about the health of Europe’s banks offset optimism from a flurry of corporate deal making.

The lackluster performance in Asia and Europe followed a down session on Wall Street, where losses were led by financial stocks after Moody’s Investors Service cut its rating on Anglo Irish Bank Corp., one of Europe’s more troubled lenders.

With no major economic reports to drive trading, investors also focused on major deals in the airline, consumer products and retailing industries. The acquisitions are seen as a sign of improved corporate confidence but weren’t enough to extend the gains that U.S. stocks have made in September.

Major benchmarks in Europe all traded in negative territory. Britain’s FTSE 100 was off 1 percent at 5,517.56, France’s CAC-40 dropped 1.1 percent to 3,724.15 and Germany’s DAX fell 0.9 percent to 6,222.56.

Futures augured more losses on Wall Street. Dow futures retreated 34 points, or 0.3 percent, to 10,717.00 and broader S&P futures declined 4, or 0.4 percent, to 1,133.70.

Markets in Asia shrugged off the Asian Development Bank raising its 2010 growth forecast for 44 developing and newly industrialized nations to 8.2 percent from a projection of 7.5 percent issued in April.

Japan’s Nikkei 225 stock average slid 107.38, or 1.1 percent, to 9,495.76 with exporters hurt by the yen’s sustained strength.

Investors are closely monitoring the Japanese currency, which authorities may try to weaken again soon after the central bank earlier this month bought dollars to weaken the yen for the first time in six years. The Nikkei financial daily reported that the central bank will discuss further monetary easing when it meets next week.

South Korea’s Kospi lost 0.3 percent to 1,855.97, Hong Kong’s Hang Seng retreated 1 percent to 22,109.95 and the Shanghai Composite Index fell 0.6 percent to 2,611.35.

Australia’s S&P/ASX 200 benchmark reversed course to close down 0.1 percent at 4,669.80. Indexes in India, Singapore and Taiwan also lost ground.

In New York on Monday, the Dow Jones industrial average fell 48.22, or 0.4 percent, to close at 10,812.04.

The Standard & Poor’s 500 index dropped 6.51, or 0.6 percent, to 1,142.16, while the Nasdaq composite index fell 11.45, or 0.5 percent, to 2,369.77.

In deal news, consumer products giant Unilever NV agreed to buy beauty products maker Alberto Culver Co. for $3.7 billion. Southwest Airlines Co. will purchase AirTran Holdings Inc. for about $1.4 billion. Wal-Mart Stores Inc. proposed to buy South African consumer goods distributor Massmart Holdings Ltd. for about $4.25 billion.

Benchmark crude for November delivery was down 78 cents at $75.74 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 3 cents to settle at $76.52 on Monday.

In currencies, the dollar slipped to 84.21 yen from 84.26 yen late Monday in New York. The euro fell to $1.3425 from $1.3431.

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