Hot Topic NBR Focus: GMO
Hot Topic NBR Focus: GMO
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Global stocks plunge as Greece default looms

MARKET CLOSE: Wall Street staged a bounceback in the final few minutes, sending stocks to their second gain in seven sessions.

Nevil Gibson
Tue, 13 Sep 2011

Global sharemarkets slumped on fresh worries that Greece is headed for default and that Europe's debt crisis will soon come to a head.

But a last-minute rally on Wall Street sent stocks soaring just before the close for a second day's gain in seven sessions. The Dow Jones Industrial Average rose 68.91 points, or 0.6%, to 11,061.04 at the close (8am NZ time) after spending most of the seesion in the red.

The S&P 500 index was up 0.7% to 1162.27, while the Nasdaq Composite rose 1.1% to 2495.09.

Other markets: Europe, Asia down
Stock markets in Asia and Europe plunged on fears of the damage that a Greek default could do to the region's banking system. The French government and its central bank issued unusual statements of support for their banks.

Investors feared the credit ratings of France's three largest listed banks could be downgraded this week by Moody's Investors Service because of their exposure to Greece.

The French CAC 40 index dropped 4% to close at 2854.81, the steepest loss among major European markets and its fifth biggest loss in a year that already has wiped out 25% of its value.

BNP Paribas fell 12.3% while Credit Agricole and Societé Générale each dropped more than 10%.

Germany's DAX fell 2.3% to close at 5072.33 and London's FTSE 100 lost 1.6% to 5129.62. The Stoxx Europe 600 index slid 2.5% to close at 218.93.

Asian stock markets ended sharply lower, with some shares hitting multiyear lows.

Japan's Nikkei Stock Average fell 2.3% to 8535.67, its lowest close since 2009, while Hong Kong's Hang Seng Index fell 4.2% to 19,030.54.

Australia's S&P/ASX 200 lost 3.7% to 4038.5, Singapore's FTSE Straits Times Index fell 2.9% to 2743.58 and India's Sensex fell 2.2% to 16,501.74.

Korean, Taiwanese and mainland Chinese markets were closed for holidays.

Commodities: Oil rises, gold falls
Crude futures turned higher as traders backed away from fears about the repercussion of a possible Greek default on the broader economy.

Light, sweet crude for October delivery was up 95USc, or 1.1%, to settle at $US88.19 a barrel in New York. Brent crude on the ICE futures exchange rose 24USc, or 0.2%, to $US113.01 a barrel.

Gold futures slumped as traders cashed out to cover losses in other markets. The contract for September delivery settled down $US46.50, or 2.5%, at $US1809.90 an ounce in New York.

Currencies: Euro, pound pressured
The euro and the UK pound hit seven-month lows against the US dollar as renewed fears about the euro zone's debt crisis pushed investors toward the dollar.

The euro traded at $US1.3631, down from $US1.3657 late on Friday in New York. It fell to $US1.3494 at one point, its lowest level since February 16.

The dollar was at ¥77.15, compared with ¥77.60, while the euro was at ¥105.16 compared with ¥105.94. Earlier in the global day, it fell to a fresh 10-year low of ¥103.90.

The pound was at $US1.5815 compared with $US1.5883. It fell to $US1.5775, its lowest level since January 26.

Commodity-linked currencies such as the Australian and Canadian dollars fell sharply, while emerging-market currencies also tumbled.

Nevil Gibson
Tue, 13 Sep 2011
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Global stocks plunge as Greece default looms