TSX regains most of Tuesday's losses
A trader looks at the monitor where Lehman Brothers stock is traded at the New York Stock Exchange as the market opened on Wednesday.(David Karp/Associated Press)
Toronto's key stock index regained nearly three-quarters of Tuesday's bone-rattling loss Wednesday, but U.S. markets made a much weaker recovery, despite a restructuring at ailing investment bank Lehman Brothers.
The S&P/TSX composite index closed up 336.96 points at 12,483.71, a gain of nearly 2.8 per cent.
It tumbled nearly 488 points Tuesday on weakness in commodity stocks.
In New York, the Dow Jones average was up about 38.19 points to close at 11,268.92.
Asian markets weakerThe gain in Canada and nearly flat U.S. market were a distinct contrast to Asian markets, where the Tuesday's North American weakness continued to hammer prices in overnight trading as investors bet against a near-term global economic recovery.
The Hang Seng, Hong Kong's flagship exchange, led the losing parade, finishing down 491 points, or 2.4 per cent, and closing below 20,000 at 19,999.78.
But the Hang Seng was not alone in pushing the down button.
Australia's major equities indices were all down more than 1.5 per cent. Japan's Nikkei index slipped 0.44 per cent while Thailand's main exchange fell 1.32 per cent.
Admittedly, these losses paled to the shellacking Toronto's index took on Tuesday as the TSX lost almost four per cent of its value in trading. New York's Dow Jones industrial index also took a pounding, down 2.4 per cent.
Both markets were hurt by concerns over the spreading U.S. mortgage crisis and a growing economic downturn.
Asian investors took their cue from Tuesday's troubles in North America and decided to turn some of their holdings into cash.
Lehman's capital crunchOne worry, Asian experts said, was the fear that Lehman Brothers, the big American investment house, would not be able to muster sufficient financial resources to keep its doors open.
"Australian shares are set for a fall on Wednesday, with financial stocks set to lead as worries about investment bank Lehman Brothers' ability to raise cash sent Wall Street lower," said Macquarie Group Ltd., a large Australian financial services company, in a morning commentary to its clients.
On Wednesday, Lehman Brothers reported a $3.9 billion US loss in its fiscal third-quarter and announced a major restructuring designed to slim down its operations.
Economic woesForeign investors are also concerned about economies beyond North America.
"There are clear signs that the U.S. economic weakness has spread to other countries," said Hong Kong's Hang Seng Bank in a market commentary this week.
Indeed, the United Kingdom faces its worst slowdown in 60 years, according to the Bank of England. As well, Japan has a stagnant retail sector amidst growing fears of a recession.
Oil worries also have been a nagging fear for investors, ironically not because of rising prices but falling demand.
Investors sometimes see spot crude prices as a proxy for economic activity. Thus, as oil prices have fallen in recent weeks, stock buyers have begun to view that trend as further proof of global economic trouble.
On Wednesday, the International Energy Agency cut its forecast for global oil demand. The organization now expects the world's main industrialized nations to use 1.7 per cent less oil in 2008 compared to 2007.
Oil prices were up marginally in early New York trading Wednesday at $103.57 US a barrel, an increase of 31 cents.
0 comments:
Post a Comment