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Stocks mixed on US economy fears | |
(about 2 hours later) | |
European stocks have reversed early falls to move ahead in late morning trading, as turbulence returned to the markets after fresh US economy fears. | |
The UK's FTSE 100 index was up 14 points or 0.3% to 5,882 by 1130GMT, after previously falling by the same amount. Germany's Dax was up 0.4%. | |
Japan's main Nikkei 225 index had earlier finished 4.7% lower. | |
Shares on Wall Street had closed down overnight after figures showed contraction in the US service sector. | |
America's main Dow Jones index ended Tuesday trading down 3%. | America's main Dow Jones index ended Tuesday trading down 3%. |
Both the Nasdaq and S&P 500 indexes also lost 3%. | Both the Nasdaq and S&P 500 indexes also lost 3%. |
Hong Kong's Hang Seng index ended Wednesday trading down 5.4% , while India's BSE lost 3.2%. | |
'Bear market' | 'Bear market' |
"It's unbridled pessimism," said Francis Lun, general manager at Fulbright Securities in Hong Kong. | "It's unbridled pessimism," said Francis Lun, general manager at Fulbright Securities in Hong Kong. |
There's a real probability that both the US and Europe will go into recession at the same time Francis Lun, general manager at Fulbright Securities in Hong Kong | There's a real probability that both the US and Europe will go into recession at the same time Francis Lun, general manager at Fulbright Securities in Hong Kong |
"Everyone is concentrating on a US recession, but Europe is also looking bad. We are in for a bear market now." | "Everyone is concentrating on a US recession, but Europe is also looking bad. We are in for a bear market now." |
The weak US service sector data came from the Institute of Supply Management's index of business activity in the non-manufacturing sector. | The weak US service sector data came from the Institute of Supply Management's index of business activity in the non-manufacturing sector. |
Its January reading came in at 41.9, the first recorded monthly contraction in almost five years. | Its January reading came in at 41.9, the first recorded monthly contraction in almost five years. |
With any number above 50 indicating growth, economists had forecast a milder decrease to 53 from 54.4 in December. | With any number above 50 indicating growth, economists had forecast a milder decrease to 53 from 54.4 in December. |
"There's a real probability that both the US and Europe will go into recession at the same time," added Mr Lun. | "There's a real probability that both the US and Europe will go into recession at the same time," added Mr Lun. |
"It's a financial mess on the two continents with the sub-prime crisis and the SocGen debacle." | "It's a financial mess on the two continents with the sub-prime crisis and the SocGen debacle." |