Thursday, February 12, 2009

World stocks sag on February 12, 2009 over concerns about Obama plans

World stock markets fell amid pessimism about the Obama administration's plans to fix the U.S. banking system and restore the overall health of the world's largest economy. European stocks were also undermined by a raft of disappointing earnings. The FTSE 100 index of leading British shares fell 58.82 points, or 1.4%, to 4,175.44, while Germany's DAX declined 96.81 points, or 2.1%, to 4,433.28. The CAC-40 in France was 45.08 points, or 1.5%, lower at 2,982.64. The raft of grim corporate news in Europe comes as the markets have largely given the thumbs-down to the passing of a $789 billion stimulus bill in Congress and U.S. Treasury Secretary Tim Geithner's bank rescue plan, which could cost up to $2 trillion. On the Geithner plan, investors worried about the lack of detail, specifically the absence of any indications about how the banks' toxic assets would be bought. That risk aversion was certainly evident in Asia earlier, where Japan's Nikkei stock average tumbled 240.58 points, or 3%, to 7,705.36 - the lowest in nearly three months. Meanwhile, Hong Kong's Hang Seng lost 310.91 points, or 2.3%, to 13,228.30, while South Korea's Kospi lost 0.9% despite another rate cut from the country's central bank. Shanghai's main index was off 0.6% and Taiwan's benchmark retreated 2.4%.

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