ID :
12190
Fri, 07/11/2008 - 12:17
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Shortlink :
https://oananews.org//node/12190
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Global stocks feared to be entering bear market
TOKYO, July 11 Kyodo - Major bourses around the world are feared to be entering into a bear market as a drain of capital continues amid persistent deterioration in the investment environment under growing inflationary pressure and a credit crunch, analystssay.
In June alone, the value of global stocks is estimated to have lost $3 trillion in the weak-market trend, according to U.S. credit rating agency Standard &Poor's.
In the international financial markets, a market is considered to have enteredbear territory when share prices plunge by 20 percent from their latest highs.
The 30-issue Dow Jones Industrial Average and the tech-laden Nasdaq Composite Index in the New York market have already entered into a bear market by thatdefinition.
The closing quote of the S&P 500 index on Wednesday was also 20 percent lowerfrom its previous peak logged last October.
A similar picture is seen in the European stock markets including Frankfurt andParis, with benchmark indexes slipping over 20 percent from the previous highs.
The bellwether index of the Shanghai stock market now stands at half of its last high and Japan's 225-issue Nikkei Stock Average is 28 percent lower thanits previous peak marked in July last year.
A vicious circle is going on in the U.S. economy. Fears over the health of the U.S. economy lead to a weaker dollar against other key currencies, which has prompted crude oil prices to shoot up as the dollar-denominated oil pricesbecome cheaper.
High oil prices push up overall prices, weighing on corporate profits and private consumption. In the face of growing uncertainty over the course of theglobal economy, investors keep unloading stocks.
S&P estimates that the global stock markets lost $5.2 trillion in value inJanuary.
As for prospects for market recovery, some watchers remain pessimistic.
When the U.S. equity markets were hit by the burst of the information-technology sector bubble and became bearish in 2000 and 2001, theyfinally regained upward momentum in a steady manner in 2006 and after.
In the current market downturn, an analyst at a European investment bank said the global stock markets could fall further with investors accelerating theirselling.
Alan Raskin, chief international strategist at RBS Greenwich Capital, also voiced concern about prolonged doldrums for stock markets, saying it appears the world economy will not be able to pull out of the financial crisis in thesecond half of this year.
==Kyodo
In June alone, the value of global stocks is estimated to have lost $3 trillion in the weak-market trend, according to U.S. credit rating agency Standard &Poor's.
In the international financial markets, a market is considered to have enteredbear territory when share prices plunge by 20 percent from their latest highs.
The 30-issue Dow Jones Industrial Average and the tech-laden Nasdaq Composite Index in the New York market have already entered into a bear market by thatdefinition.
The closing quote of the S&P 500 index on Wednesday was also 20 percent lowerfrom its previous peak logged last October.
A similar picture is seen in the European stock markets including Frankfurt andParis, with benchmark indexes slipping over 20 percent from the previous highs.
The bellwether index of the Shanghai stock market now stands at half of its last high and Japan's 225-issue Nikkei Stock Average is 28 percent lower thanits previous peak marked in July last year.
A vicious circle is going on in the U.S. economy. Fears over the health of the U.S. economy lead to a weaker dollar against other key currencies, which has prompted crude oil prices to shoot up as the dollar-denominated oil pricesbecome cheaper.
High oil prices push up overall prices, weighing on corporate profits and private consumption. In the face of growing uncertainty over the course of theglobal economy, investors keep unloading stocks.
S&P estimates that the global stock markets lost $5.2 trillion in value inJanuary.
As for prospects for market recovery, some watchers remain pessimistic.
When the U.S. equity markets were hit by the burst of the information-technology sector bubble and became bearish in 2000 and 2001, theyfinally regained upward momentum in a steady manner in 2006 and after.
In the current market downturn, an analyst at a European investment bank said the global stock markets could fall further with investors accelerating theirselling.
Alan Raskin, chief international strategist at RBS Greenwich Capital, also voiced concern about prolonged doldrums for stock markets, saying it appears the world economy will not be able to pull out of the financial crisis in thesecond half of this year.
==Kyodo
