Jun
26
Global stocks and dollar fall on weak financial sector
Filed Under Offshore News, banking Tags: banking —
Global stocks and dollar fall on weak financial sector. Trouble is in the horizon for World Banking and financial sector.
The euro rose to $1.5672 from $1.5574 Wednesday afternoon in New York.
The pound rose to $1.9781 from $1.9678.
The dollar fell to $107.93 from $108.24,1.0345 Swiss francs from 1.0416 francs.
U.S. light crude futures for August delivery fell 38 cents to $134.17.
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The declines occurred when the U.S. Federal Reserve Bank kept its interest rate policy unchanged. On Wednesday, the Fed announced, “Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased,” . Thierry Lacraz, a strategist at Swiss said, “The Central Bank decision was not a surprise, and anyone can read what he wants into the Fed’s statement, The move today is driven by the fact that people are realizing banks need more and more capital, and by the fact that Goldman has added Citi to its sell list”
When the European stock markets and most Asian indexes were knocked out on Thursday, and when one more European bank was stimulated to raise capital the Goldman Sachs assumed huge losses on US brokerages. The Dutch banking group Fortis has losses on 11% on Brussels Trading, the Belgian-Dutch financial services group declares that they would shore up its capital position by more than 8 billion, partially by selling of stock. Fortie said it will issue more 1.5 billion new shared up to 2 billion for non- dilutive preferences shares. It will accumulate 1.3 billion by not paying the interim dividend 2008. it will sell of those unnecessary assets and let out to real state. Goldman incise its vision on U.S. brokerages to “neutral” from “attractive” and added Citigroup to its “conviction sell” list, assuming that the bank would book $9 billion of write-downs in the second quarter.
During the morning, the trading of FTSE 100 index in London was 0.6 percent lower, while the DJ Euro Stoxx 50 index, a barometer of euro zone blue chips, was down to 1.1 percent. The CAC 40 in Paris was cut down to 1 percent, and the DAX in Frankfurt was down to 0.8 percent.
In Asian trading, the Tokyo benchmark Nikkei 225 stock average chops down to 0.1 percent, whereas the Hang Seng index decreased to 0.8 percent. The S&P/ASX 200, the Sydney market gauge, climbed 1.3 percent, jump over the trend.
The European Central Bank (ECB), by next focusing only on inflation keeps on increasing its main rate which was target to 4.25.The Bank of England has signaled that it will hold rates stable at 5 percent for now. The Bank of Japan is expecting to keep its overnight rate target up to 0.5 percent for a while. The high interest rate gap in favor of European assets gives investors an encouragement to sell dollars and yen and buy euros and pounds.
The euro gone up to $1.5672 from $1.5574 on Wednesday afternoon in New York. The pound get higher to $1.9781 from $1.9678.
U.S. light crude futures for August delivery fell 38 cents to $134.17. Gerard Burg, a commodities analyst at National Australia Bank in Melbourne stated, “The surprise rise in U.S., the basic stocks has keen for declining demand outlook in the U.S.,The market will focus on the U.S. economic data due later today to get a clearer picture of the economy and its impact on oil demand.” Investors were expecting to the discharge later Thursday of U.S. data, including a revised final first-quarter gross domestic product, existing-home sales for May and weekly jobless claims.
