Japanese stocks regain strength
By CBS MarketWatch
Last Update: 8:50 PM ET Sep 26, 1999 World indexes
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NEW YORK (CBS-MW) -- Japanese shares showed signs of renewed strength on Monday morning, after the other six members of the Group of Seven expressed "concern" about the value of the yen and said they'll consider coordinated intervention to torpedo the yen.
In morning trade, the benchmark Nikkei 225 Average rose 124.07 points, or 0.74 percent, to 16,995.80. December futures rose 250 points to 16,970.
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Updated:
9/26/99 3:46:10 PM ET
The BOJ seemed to soften its stance on the possibility of further monetary easing by the end of the G7 meeting, and on Sunday its governor told reporters that its monetary policies were related to movements in the currency market. See related story.
In recent trade, the dollar brought 105.91 yen, up from 104.20 yen in New York at the end of Friday trade.
World markets Friday
Shares traded on the Venezuelan bourse enjoyed yet another rally on Friday, albeit milder than the 6 percent plus gains each of the past two days on a lasting aura from oil prices and perceived improvement in the country's political situation.
In the U.S., stocks ended the week with their fourth straight loss, tempered somewhat by less severe losses than marked on Thursday.
European stocks played follow-the-leader Friday after U.S. technology shares took a beating and the Nikkei followed suit. But U.K. banking stocks danced to a different beat, getting a sizeable lift from surprise merger and acquisition action in the sector.
U.S. markets Friday
The Dow Jones Industrial Average declined 39.26 points, or 0.4 percent, to 10,279.33.
The Nasdaq Composite lost 9.42 points, or 0.3 percent, 2,878.72. The Standard & Poor's 500 Index was down 0.3 percent. The Russell 2000 Index of small-capitalization stocks declined 0.7 percent. See U.S. Market Snapshot.
The U.S. equity market's weakness buttressed bond prices Friday, which plowed higher for the third consecutive session.
The 30-year bond rose 1/8 to yield 5.979 percent. The 10-year, meanwhile, gained 5/32 to yield 5.772 percent. The 5-year added 1/32 to yield 5.657 percent. The 2-year inched up 1/32 to yield 5.532 percent. The discount rate on the 52-week bill was up 2 basis points at 4.92 percent. In the futures pit, the December Treasury bond contract rose 30/32 to 115-12. See Bond Report.
Americas' markets and closing prices Friday
Still-lofty levels for Venezuela's economic staple provided the impetus for mild gains on the IBC Friday, enticing investors into Venezuelan shares for the third straight day.
Most Latin American shares were lower, however, as sentiment from the weaker finish on Wall street meandered to several markets south of the border.
Argentina's Merval slipped 0.16 points, or 0.12 percent, to 506.540; Brazil's Bovespa closed up 140 points, or 1.23 percent, to 11,525;
Chile's IGPA fell 1.56 points, or 0.03 percent to 4698.76;
Mexico's IPC advanced 10.560 points, or 0.21 percent, to 4984.49;
Peru's Lima General lost 14.99 points, or 0.82 percent, to 1808.76; Venezuela's IBC rallied 103.21 points, or 1.81 percent, to 5791.77.
Canada's TSE 300 Composite dropped 48.72 points, or 0.72 percent, to 6763.40.
Currency watch
In the currency markets, the dollar made up some lost ground against the yen as traders awaited the outcome of a weekend meeting of the Group of Seven Industrialized Nations. See full story. In New York, the dollar was up 0.3 percent to 104.15 vs. the Japanese currency.
While talk that a plan to shore up the dollar may emerge at the G-7 gathering has been plentiful, most in the market aren't putting much faith in the possibility of seeing a joint U.S-Japan intervention.
"The probability that a solution will come out of the G-7 meeting is extremely low," remarked Jeremy Fand, senior foreign exchange strategist at BankBoston.
However, U.S. Treasury Secretary Lawrence Summers is expected to utter strong words on Japan's need to use additional fiscal and monetary measures to strengthen their economy and assure a long-term recovery.
The euro fell 0.7 percent on the dollar, to $1.0442. The British pound fell 0.2 percent to $1.6420.
See latest currency quotes and commodity prices.
Gloomy day for European stocks
In London, the FTSE 100 fell 32.10 points to 5,937.60. In Paris, the CAC 40 shed 60.37 points, or 1.3 percent, to 4,540.87; and in Frankfurt, the Xetra DAX got hurt worst of all, sinking 113.04 points, or 2.1 percent, to 5,186.52. For London stocks see most active, and for other bourses see world indexes.
The London market had the Bank of Scotland PLC to thank for its mild depression. The bank launched a $34.17 hostile takeover bid for larger rival National Westminster Bank PLC, in a move which set the sector alight. See full story.
NatWest (NW: news, msgs) shares rocketed up 297 pence, or a whopping 28.10 percent, to 1354. Bank of Scotland shares added 31 pence, or 4.4 percent, to 737.50.
The whole sector took off: Royal Bank of Scotland PLC leapt 128 pence, or 11.1 percent, to 1277, Standard Chartered PLC gained 66 pence, or 8 percent, to 890, and Abbey National PLC rose 78 pence, or 7.8 percent, to 1079.
Stormy weather
But outside the banking sector, the mood was as nasty as the late September London weather. The Dow's 2 percent drop and the Nasdaq's near 4 percent tumble, followed by the Nikkei's fall below 17,000 set the tone.
"It's very difficult for European stocks to escape unscathed after that," said Matt Dennis, European equity strategist at ABN Amro Hoare Govett in London. "We don't buy into the view that European markets have decoupled completely and can withstand that kind of a drop."
Technology shares took the brunt of the abuse, after the tech-heavy Nasdaq's precipitous decline. In Frankfurt, software maker SAP AG (SAP: news, msgs) took it on the chin, losing 14.90 euros, or 3.5 percent, to 412. Similarly, Finnish cell phone maker Nokia (NOK: news, msgs) dropped 2.77 euros, or 3.2 percent, to 83.78.
In France, Alcatel, the telecommunications company, dropped 5.40 euros, or 4.04 percent, to 128.20. Shares in Equant NV (ENT: news, msgs), another telecoms group, shed 1.15 euros, or 1.55 percent, to 73.
DaimlerChrylser changes management
Outside the tech sector, DaimlerChrysler AG (DCX: news, msgs) shares added .07 euro to 64.75, after hitting new lows Thursday. The shares came back after the company reported a wide-ranging restructuring of its top management, including the resignation of its North American president, Thomas Stallkamp.See full story.
Another stock in the news Friday: Reuters Group PLC (RTRSY: news, msgs). The U.K. media giant shed 27.50 pence, or 3.8 percent, to 697.50, adding to Thursday's 14.9 percent decline. Investors sold the shares after analysts downgraded the stock, following a meeting on its Instinet electronic brokerage business. See full story.
Investors also had their eyes on the German utilities Viag AG and Veba AG (VEB: news, msgs). The Wall Street Journal reported that the two are close to finalizing a $14.52 billion merger. Viag shares added 0.01 euro to 20.25; Veba shares climbed 0.60 euro, or 1.13 percent, to 53.50.
Currency watch
In the currency markets, the dollar made up some lost ground against the yen as traders awaited the outcome of a weekend meeting of the Group of Seven industrialized nations. In London, the dollar rose 0.2 percent to 104.06 versus the Japanese currency.
Some traders were bracing for a possible announcement of co-ordinated action in foreign exchange markets by Japan and its G-7 partners to weaken the surging yen. Still, others downplayed the likelihood of such a move. "We view this as optimistic, especially given recent comments by U.S. officials suggesting they are satisfied with dollar/yen at current levels," said Grace Chen, treasury economist at The Royal Bank of Scotland in London.
Elsewhere in the currency markets, the euro fell 0.6 percent on the dollar, to $1.0453. It dropped 0.3 percent on the yen, to 108.76.
The British pound fell 0.2 percent to $1.6415. See currencies.
Nikkei tumble
Japanese stocks took their cue from Wall Street, as the Nikkei tumbled 454.03 points, or 2.62 percent, to 16,871.79. The market was closed on Thursday for a national holiday.
International Trade and Industry Minister Kaoru Yosano said Friday's plunge could have a negative impact on the world economy.
"I am concerned the fall on the stock market, along with the yen's surge, could have a negative impact on the world economy, not only on the Japanese economy," he was quoted as saying in a report from the Kyodo News Service. "It is regrettable that the share price index fell below the 17,000 level."
Tokyo share prices started lower following Wall Street's selloff, which was prompted by Microsoft president Steve Ballmer's warning that technology stocks are overvalued.
Tokyo shares were also weighed down by caution ahead of the meeting of finance ministers and central bankers from the Group of Seven industrialized nations, market players said.
The broader Tokyo Stock Price Index of all issues listed on the first section was down 38.25 points, or 2.59 percent, to 1,441.03. The TOPIX closed down 50.05 points, or 3.27 percent, on Wednesday.
The yield on the benchmark Japanese government bond fell to 1.7750 percent from Wednesday's finish of 1.7950 percent. Its price rose 0.17 point to 99.35.
In Hong Kong, the Hang Seng Index slid 1.88 percent to 12,965.8, hit by losses in Tokyo and Wall Street's slide to its lowest closing level in more than five months on Thursday.
"This is in line with expectations due to Wall Street and Japan," said Howard Gorges, a South China Securities director. |
