Hydrablog

http://www.nytimes.com/2008/03/31/business/31cnd-markets.html
March 31, 2008
Stocks Fall in Europe and Asia
By DAVID JOLLY [IPE] [globalization] [complex interdependency] [the fed reserve’s intervention late earlier this month to bail out Bear Stearns] [brokered deal with JP Morgan and indemnified their risk] [ripples through global markets] [now comes another round as markets anticipate unemployment, inflation, and credit crunch news this week] [**********]
PARIS — Stocks fell in Europe and most of Asia on Monday amid expectations of more losses in the banking sector, as investors prepared to close out a dismal quarter. Futures prices showed Wall Street was set to open lower.
“We’re afraid we’re going to see some emergency capital-raising measures from the banks,” said Valérie Cazaban, a fund manager at Stratège Finance. “For the moment, we are very pessimistic.”
Shares of UBS, the biggest Swiss bank, fell 3.9 percent, giving it a loss for the year of about 47 percent. Merrill Lynch analysts predicted that UBS, which has already written off billions of dollars in losses related to the United States housing market, would have to write off another $11 billion for the first quarter.
Merrill Lynch analysts wrote in a note to clients that UBS would likely have a loss for the quarter of more than $8 billion and that a new round of capital increases there was “a real possibility.” [****] Dominik von Arx, a spokesman for UBS, declined to comment on the Merrill report, but he said that investors would have a clearer picture of the bank’s plans this week when UBS publishes the agenda for its annual shareholders meeting.
The FTSE 100 index in London was down 0.8 percent in late morning trading, [***]which would give it a loss of 13 percent in the first three months of 2008. The DJ Euro Stoxx 50 index, a barometer of blue-chip euro zone companies, was down 1.3 percent, putting it on track for a quarterly loss of 18 percent. The CAC 40 in Paris, down 0.8 percent, was heading for a quarterly loss of 17 percent, while the Dax in Frankfurt was off 1.4 percent and headed for a 20 percent quarterly loss.
In Tokyo, the Nikkei 225 stock average closed 2.3 percent lower, giving investors in the Japanese market benchmark a loss for the quarter of more than 18 percent. [***]The Hang Seng fell 1.9 percent, giving the Hong Kong market a first-quarter loss of nearly 18 percent. The S&P/ASX 200 index in Sydney, which ticked 0.1 percent higher Monday, finished the quarter nearly 16 percent lower.
The Dow Jones industrial average, meanwhile, appeared set to close out the quarter in comparatively good shape. The index was down 7.9 percent in 2008 before the start of trading Monday, with index futures down 42 points, indicating a slightly lower open.
Ms. Cazaban said she expected the second quarter of the year to look much like the first, at least until the banking sector problems are fully exposed. She said there could be yet more bad news to come from corporate pension funds, some of which have invested heavily in the kind of mortgage securities that have caused problems for the banking sector.
The dollar fell against the euro after news that inflation in the euro zone had accelerated. [*****] Prices in the 15 countries that share the currency rose at an annual rate of 3.5 percent in March, according to the official Eurostat statistical agency. That marked an acceleration from the 3.3 percent rate in February.
The euro rose to $1.5805 from $1.5796 late Friday in London, while the pound fell to $1.9890 from $1.9950. The dollar fell to ¥99.55 from ¥99.99, and fell to 0.9940 Swiss franc from 0.9950 franc. [*****] [sub unity for the dollar and yen] [unity: $1 = Y100]
Oil prices slipped. Nymex crude for May delivery fell 31 cents to $105.31 a barrel. Gold futures rose $5.90 to $936.50.
Copyright 2008 The New York Times Company