World stocks skid lower Thursday, extending losses

08:09, July 02, 2010      

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Chinese stocks skidded much lower on Thursday as investors were worried about a glimmer global economic recovery, and concerned a colossal US$23 billion IPO of China's Agriculture Bank in July would drastically drain up market liquidity.

The Shanghai stock composite index closed down 1.03 percent to 2,373.79 points, with a greatly lowered trading volume of mere 40 billion yuan. The index was the lowest in more than 16 months.

U.S. stocks fell on Thursday as manufacturing and labor market data heightened public fears of a double-dip recession before Friday's key employment report.

Major Wall Street indexes were lower for a fourth straight day after suffering their worst quarter since late 2008. And some American economists and market analysts are seriously worried about a Japan-style deflation crippling the U.S. economy, which is roiling the stock market.

The Dow Jones industrial average dropped 41.49 points, or 0.42 percent, to 9,732.53. The Standard & Poor's 500 Index (.SPX) shed 3.33 points, or 0.32 percent, to 1,027.38. The Nasdaq lost 7.88 points, or 0.37 percent, to 2,101.36.

Elsewhere, Asian markets lost ground for a third straight day over new concerns about Europe's economic outlook after Moody's Investors Service warned it may downgrade Spain's sovereign debt rating.

While a key central bank report released Thursday showed business confidence among Japan's biggest manufacturers improved for a fifth straight quarter, the Nikkei index was still taking its cues from Wall Street, which closed out a painful second quarter Wednesday, leaving investors with heavy losses.

Japan's benchmark Nikkei 225 stock index declined 191.04 points, or 2 percent, to 9,191.60, extending losses after falling nearly 2 percent Wednesday to a seven-month low.

South Korea's Kospi index shed 0.7 percent to 1,686.24, and Australia's S&P/ASX 200 was down 1.5 percent at 4,237.50.

Moody's Investors Service placed Spain's sovereign debt rating "on review for possible downgrade" on Wednesday because of weak economic prospects.

Spain has only just crawled out of nearly two years of recession after a boom, fueled by construction and free-flowing credit, imploded.

The nation's public coffers have been drained by spending to cope with a jobless rate that now stands at 20 percent. Spain is under intense international pressure to slash its deficit.

By People's Daily Online


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