Asia, Europe Close Lower
European stock markets were lower Monday. In London, the FTSE 100 lost 64.50 points, or 1.32%, to close at 4827.10. The Financial Times Stock Exchange recovered some ground in the afternoon session, but still ended deep in the red. The afternoon boost came from flat U.S. markets, thanks to better-than-expected results from 3M and Bank of America. Still, earlier negativity remained in the FTSE, with investors cautious ahead of the reporting season. Mining, cyclicals, and financials led decliners due to worries about the global economy: Anglo American dropped 2.5%. Tech stocks reacted to IBM's poor results last week and Philips' disappointing update today. Reuters is poised to divest its Instinet unit to the Nasdaq stock market for about $1.8 billion, according to the Financial Times.
Germany's Dax lost 110.05 points, or 2.55%, to close at 4202.20. Frankfurt closed markedly lower but above the 4,200 level after corporate earnings worries and fears the U.S. economy may not be as strong as first thought sent global stock markets tumbling. With upwards of 150 S&P 500 companies reporting this week, the scope for further falls is high. And with the market braced for U.S. auto giants GM and Ford due on Wednesday, markets are still vulnerable to further significant falls. Early sentiment in Europe was not helped by 1Q results from Philips, which showed earnings slumped 79%, missing analysts' forecasts. Tech stocks throughout Europe remained weak all day. TUI looked particularly vulnerable after rival Expedia's CEO said in the FTD it is looking to go head to head with TUI for top spot in the European online travel market. VW fell amid concerns about a possible collapse in earnings from China this year after its market share dropped to 11% in the first two months. Goldman Sachs said it sees a danger of VW posting an operating loss of 400 million euro in 2005.
France's CAC 40 lost 82.69 points, or 2.05%, to close at 3949.59. Paris stocks pared losses in afternoon trade as good earnings reports from Bank of America and 3M kept the Dow and the Nasdaq afloat in New York trade. Still, most European markets ended broadly lower, and Paris was no exception, down 2.1%. Crude prices tested levels around $50 per barrel, but investors read this as a sign of a weakening global economy. Total lost 1.8% in Paris. Technology stocks like Alcatel, Thomson, and STM, were hit by disappointing results from European bellwether Philips. Pernod Ricard was lower with the market. The drinks group is working towards announcing a formal takeover for Allied Domecq by Thursday.
Asian markets were lower Monday. In Japan, the Nikkei 225 sank 432.25 points, or 3.80%, to close at 10,938.44, tracking the fall seen on Wall Street last Friday. The anti-Japanese sentiment in China also weighed on the country's stocks. On fears of a boycott of Japanese products in China, big exporters Sony and Toshiba fell 3.7% and 2.3%, respectively. Kinki Nippon Tourist plunged 7.3% on worries about cancellations for China tours. Travel agency HIS sank 6.1%, while Eurasia Travel plunged 11.4%. Steel and shipping issues which have benefited from China, also fell. Japan Steel Works slumped 7.2%. Kobe Steel and Nippon Steel lost 2.8% and 3.5%, respectively, whereas Kawasaki Kisen Kaisha fell 3.4%. On the upside, Livedoor rose 6.4% on the back of news that the internet firm will tie up with Fuji TV Network.
In Hong Kong, all 33 blue chips fell. At close, the Hang Seng Index plunged 283.52 points, or 2.1%, to 13,355. Total mainboard turnover stood at a hefty $21.4 billion (hong kong). Top HSI percentage laggard was Lenovo, hit by its U.S. peer IBM's poor performance.
Canada's benchmark TSX/S&P gained 53.87 points, or 0.58%, to close at 9,330.99.