A roundup of trading on major world markets:
NEW YORK – US stocks clawed back early sharp losses on S&P’s downgrade of France, Spain, Austria and Italy and new worries over Greece Friday, but still ended the day in the red.
At the close the Dow Jones Industrial Average was down 48.96 points (0.39 per cent) at 12,422.06.
The broad-based S&P 500 lost 6.41 per cent (0.49 per cent) to 1,289.09, while the tech-heavy Nasdaq Composite gave up 14.03 (0.51 per cent) to end at 2,710.67.
Earlier losses on each of the indices topped one per cent as credit downgrades for a swathe of European countries were imminent and after banks negotiating with Greece to write off some of its debt said talks had broken down.
Bond prices rose. The yield on the 10-year Treasury slipped to 1.85 from 1.93 per cent on Thursday, while the 30-year dropped to 2.90 per cent from 2.98 per cent.
LONDON – Standard & Poor’s imminent downgrade of eurozone economic giant France’s triple-A credit rating sent stocks sliding and the euro plummeting on a grim Friday the 13th for the single currency.
In Brussels, EU government sources told AFP the ratings agency had warned members of the bloc France would be downgraded by one notch, while fellow top-line creditors Germany, Luxembourg and the Netherlands would be spared.
The downgrade could force France’s borrowing costs up at a time when it has already been forced to impose austerity measures to control its deficit, and is a political humiliation for President Nicolas Sarkozy.
The single currency fell back to $US1.2638, a 16-month low, while London’s FTSE 100 closed down 0.46 per cent, Frankfurt’s DAX closed down 0.58 per cent and in Paris the CAC 40 dropped 0.11 per cent by the end of trading.
Earlier on Friday, Italy raised 4.75 billion euros at mostly lower rates in a bond auction, reflecting what was then still improved market confidence and European Central Bank efforts to boost eurozone liquidity.
HONG KONG – Asian markets were broadly higher, boosted by strong bond auctions in Italy and Spain as well as soothing words from the European Central Bank on the state of the region’s finances.
The euro was also holding on to strong gains made on late Thursday trade while dealers shook off weak data from the United States.
Tokyo jumped 1.36 per cent, putting on 114.43 points to 8,500.02, while Seoul closed 0.60 per cent, or 11.11 points, higher at 1,875.68 and Sydney ended 0.36 per cent higher, adding 14.9 points to 4,195.9.
Hong Kong gained 0.57 per cent, or 109.04 points, to 19,204.42.
But Shanghai, which soared a total of more than five per cent on Monday and Tuesday, fell 1.34 per cent, or 30.34 points, to 2,244.58, with investors awaiting concrete steps by the government to ease monetary policy.
Singapore was 1.75 per cent higher, adding 47.88 points, to 2,791.54.
WELLINGTON – Wellington gained 0.24 per cent, or 7.63 points, to 3,227.46.
