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Selling eases on world markets
Washington DC News.Net
Tuesday 7th October, 2008
Stock markets around the world were mixed Tuesday with signs the panic-selling of recent days may be peaking.
In some parts of the world stock prices rose, while in others the losses were contained.
There were however pockets where large falls were still being recorded.
Early into the trading session in Europe the London, Paris, Frankfurt and Zurich stock markets were in-and-out of positive territory, with moves in either direction limited.
The Australian Reserve Bank stunned markets Tuesday with a one-percent cut in official interest rates from 7% to 6%. It was seen by some as a signal central banks would act aggressively to avert recession.
Australian markets have been lambasted by falling commodity prices which has sent the local currency reeling. The Australian dollar was .9840 cents two months ago, whereas in the past 24 hours it has dipped below .7000 cents. Normally a cut in interest rates would send a currency down, which happened in Australia Tuesday, but only momentarily. Traders figured such a substantial cut could keep the economy moving, and if mirrored by central banks in other countries, particularly on a concerted basis, could reduce prospects for a global recession. This would help the Australian dollar which rallied to more than .7200 cents after the interest rate cut.
Australian stocks rallied on news of the RBA rate cut. The key All Ordinaries index closed up 1.17%.
Indonesia's Jakarta Composite, which was Asia's worst performing bourse on Monday, having shed more than 10% of its value, was down only 1.76% at the close Tuesday.
The Singapore Straits Times was up 0.43%, while in South Korea the Seoul Composite was ahead 0.54%.
In China the benchmark Shanghai Composite was down 0.17%.
In Hong Kong and Tokyo traders remained nervous. the Hang Seng dropped 4.97% while the Nikkei 225 was down 3.03%.
Taiwan's Taiwan Weighted gained 0.34%.
Foreign currency markets were quiet after Monday's wild gyrations. In early European trading the euro was quoted a tad stronger at 1.3560. The pound also edged up to 1.7408. The Japanese yen which had flirted with the 100.00 level on Monday, was back at 101.75.
The Swiss franc was a smidgeon stronger at 1.1422, while the Australian dollar, despite the 1% interest rate cut, was stronger at .7138. The Canadian dollar remained weak at 1.1023.
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