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| Version 3 | Version 4 |
|---|---|
| Global stocks struggle to recover | |
| (about 4 hours later) | |
| European markets were broadly flat after flip-flopping nervously throughout the trading day following last week's tumble. | |
| Fears that higher interest rates around the world will hit company profits and dent consumer spending has hurt appetite for risky assets, like shares. | |
| London's FTSE 100 closed down 9.1 points at 6206.1, while Frankfurt's Dax rose 4.63 points to 7456.31. | |
| Meanwhile, US stocks were see-sawing in New York trade. | |
| The Dow Jones index of largest shares had risen 41.1 points at 13,306.6 in afternoon trade, while the broader S&P 500 was also showing tentative signs of recovery, up 5.45 points at 1,464.4. | |
| This follows a worldwide global share sell-off on Friday, led by the US, amid heightened concerns over the possibility of a credit squeeze, which could affect global economic growth. | |
| By the close of trade in New York on Friday, the Dow Jones Industrial Average of leading shares fell 1.5%, bringing its fall for the week to 4.2%, the largest weekly percentage drop since March 2003. | |
| Yet, the sharp slump on Wall Street failed to have an impact in Asia on Monday, where indexes closed up. | |
| Japan's Nikkei 225 index finished up 5.5 points at 17,289.3, while Hong Kong's Hang Seng added 169.5 points to end at 22,739.9. | Japan's Nikkei 225 index finished up 5.5 points at 17,289.3, while Hong Kong's Hang Seng added 169.5 points to end at 22,739.9. |
| US mortgage woes | US mortgage woes |
| Along with falling prices, the US housing market has been hit by crisis in the so-called sub-prime mortgage market. | Along with falling prices, the US housing market has been hit by crisis in the so-called sub-prime mortgage market. |
| This sector, which offers high interest loans to higher risk customers or people on low incomes, has seen record numbers of defaults in the past year, putting severe financial pressure on a number of companies in the industry. | This sector, which offers high interest loans to higher risk customers or people on low incomes, has seen record numbers of defaults in the past year, putting severe financial pressure on a number of companies in the industry. |
| The fear about a credit crunch has been caused by central banks raising interest rates to combat inflation. | The fear about a credit crunch has been caused by central banks raising interest rates to combat inflation. |
| Higher interest rates make it harder for firms, such as private equity groups, to continue to finance the ongoing takeover boom, leading to fears of a downturn. | |
| The Bank of England and the European Central Bank are both due to make interest rate decisions on Thursday, but analysts expect both to keep rates unchanged. | The Bank of England and the European Central Bank are both due to make interest rate decisions on Thursday, but analysts expect both to keep rates unchanged. |