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| Version 2 | Version 3 |
|---|---|
| Recession fears hit stock markets | Recession fears hit stock markets |
| (about 3 hours later) | |
| European and Asian shares have fallen on continuing fears of a US recession and slowing corporate profit growth. | European and Asian shares have fallen on continuing fears of a US recession and slowing corporate profit growth. |
| The UK's FTSE 100 stock index fell 1% to 5967.90, while Germany's Dax also lost 1% and France's Cac shed 0.5%. | |
| Earlier, Japan's Nikkei index had hit its lowest level in more than two years, closing down 3.4% at 13,504.51. | |
| The slide in share prices has been triggered by disappointing earnings at firms including JP Morgan Chase and Intel, and weak US economic data. | |
| Hong Kong's benchmark stock index, the Hang Seng, closed down 5.4% at 24,450.85 on Wednesday - its biggest one-day fall since the day after the 11 September terror attacks. | |
| Further declines? | Further declines? |
| Analysts warned that more declines may be on the way as concerns about the corporate and economic environment persist. | Analysts warned that more declines may be on the way as concerns about the corporate and economic environment persist. |
| US bank JP Morgan Chase said on Wednesday its earnings for the last three months of 2007 fell 34% as a result of its exposure to soured US mortgage loans. | |
| Wells Fargo, one of the American largest banks and mortgage lenders, also reported a fall in fourth-quarter profit, the first decline in more than six years. | |
| Intel, which makes microchips that power most of the world's computers, added to the gloomy outlook with quarterly results that disappointed many investors and a lower sales forecast than had been expected. | Intel, which makes microchips that power most of the world's computers, added to the gloomy outlook with quarterly results that disappointed many investors and a lower sales forecast than had been expected. |
| Its shares fell 14% to $19.48 in electronic trading after the New York stock exchange had closed on Tuesday. Analysts said that this indicates that its shares will get hit when the US stock market reopens later on Wednesday. | |
| We will see a bit of panic selling with a lot of investors taking cash off the table today Trent Muller, ABN Amro Morgan | We will see a bit of panic selling with a lot of investors taking cash off the table today Trent Muller, ABN Amro Morgan |
| The negative report from Intel, spurred a sell-off in technology firms worldwide on the belief that they will not be able to sustain their current rate of earnings growth in the face of slower consumer and business spending. | The negative report from Intel, spurred a sell-off in technology firms worldwide on the belief that they will not be able to sustain their current rate of earnings growth in the face of slower consumer and business spending. |
| South Korean mobile phone maker LG Electronics and LCD flat-screen TV maker LG Philips both fell almost 5% in earlier Asian trading, while German chipmaker Infineon dropped 3.4% in Europe. | |
| "We will see a bit of panic selling with a lot of investors taking cash off the table today," said Trent Muller of ABN Amro Morgan. | "We will see a bit of panic selling with a lot of investors taking cash off the table today," said Trent Muller of ABN Amro Morgan. |
| Francis Lun of Fulbright Securities said that problems in the US, where a slump in the housing market and higher interest rates have amplified concerns, would continue to stalk the markets. | Francis Lun of Fulbright Securities said that problems in the US, where a slump in the housing market and higher interest rates have amplified concerns, would continue to stalk the markets. |
| "American financial mismanagement has brought us to this economic meltdown," Mr Lun said. | "American financial mismanagement has brought us to this economic meltdown," Mr Lun said. |
| Mortgage market | Mortgage market |
| Many investors are now predicting that interest rate cuts will be needed to keep the US economy going, and the dollar fell as a result. | |
| Investors tend to seek out currencies and assets in nations with higher interest rates as that increases their returns. | Investors tend to seek out currencies and assets in nations with higher interest rates as that increases their returns. |
| On Tuesday, Citigroup said that it had made a net loss of almost $10bn for the last three months of 2007 because it had to cut the value of investments that were linked to the US housing market. | |
| The bank, one of the biggest in the world in terms of assets, said the loss had been caused by an $18.1bn exposure to bad mortgage debt. | The bank, one of the biggest in the world in terms of assets, said the loss had been caused by an $18.1bn exposure to bad mortgage debt. |
| This reinforced the extent of the housing crisis in the US, while spurring worries that other banks were still harbouring undisclosed losses. | This reinforced the extent of the housing crisis in the US, while spurring worries that other banks were still harbouring undisclosed losses. |