Global slowdown prompts stocks fall
Asian stock markets fell today as the global economic slowdown threatens to reduce corporate profits.
Companies start reporting second-quarter results this week and investors were dismayed when chip maker Advanced Micro Devices said that weaker sales in China and Europe led to an 11% drop in revenue in the April to June period.
The company had previously forecast a gain of 3%. J.P. Morgan and Google report results later this week.
Meanwhile, investors in Europe were cheered when finance ministers announced they had agreed on the terms of a bailout for Spain’s banks and the first installment of 37 billion US dollars in aid can be ready by the end of the month.
Europe’s debt crisis has hurt investor and consumer confidence, and some of the region’s countries, such as Greece and Spain, are in recession.
Some analysts say policymakers in the Europe, the US and Asia should implement monetary and fiscal stimulus to prevent global growth from slowing further.
“The eurozone needs dramatic action to stop the downward spiral,” said Jan Amrit Poser, chief economist at Bank Sarasin.
“The economic cycle in the rest of the world hinges substantially on such intervention, but accompanying actions by central banks in the US and emerging economies are also needed to halt an impending downturn.”
Japan’s Nikkei 225 index fell 0.4% to 8,825.19 and Hong Kong’s Hang Seng was off 0.3% at 19,345.23.
South Korea’s Kospi slipped 0.4% to 1,822.39. Australia’s S&P/ASX 200 dropped fractionally to 4,097.20 and China’s Shanghai Composite shed 0.2% to 2,159.75.
