Global equity prices plunged yesterday on renewed worries about the US subprime mortgage sector, with the foreign exchange market and oil trading also affected.
US and European markets were sharply lower on mounting credit fears after the ECB pumped up money supply to European banks and a French bank suspended three funds in moves linked to high-risk "subprime" property loans in the US.
"Given the kind of state of the market, you only have to mention subprime for people to start panicking," said analyst Millan Gudka at investment bank Dresdner Kleinwort.
The Dow Jones Industrial Average opened down 1.01 percent at 13,520.40 points, the NASDAQ composite slumped 1.62 percent to 2,570.54 points and the broad-market Standard & Poor's 500 index shed 1.18 percent to 1,479.81.
The European Central Bank said yesterday it had injected a record 94.8 billion euros (US$130.2 billion) into the eurozone money supply to help banks shaken by the US subprime mortgage crisis.
That was more than the bank pumped in after the September 11, 2001, attacks rattled world financial markets.
There are growing jitters about the potential fallout from problems in the US subprime lending sector, where mortgages are provided to people with poor credit histories.
That, in turn, could affect private equity groups because their takeover bids are often financed by large amounts of bank debt.
In late European trade, London's FTSE 100 index of leading blue-chip shares showed a loss of 2.39 percent to 6,241.20 points.
Frankfurt's DAX 30 shed 2.15 percent to 7,442.14 points and in Paris the CAC 40 dropped 2.47 percent to 5,607.17.
European and US markets had rallied on Wednesday.
In Paris yesterday, the share price of BNP Paribas dived 6.14 percent to 80.20 euros after a unit of the French bank said it had suspended three of its funds amid concerns sparked by the crisis in the US subprime mortgage market.
BNP Paribas Investment Partners said it had suspended the funds Parvest Dynamic ABS, BNP Paribas ABS Euribor and BNP Paribas ABS Eonia, adding that it would accept no redemptions or subscriptions until further notice.
Other major European banks, from Barclays in London to Commerzbank in Frankfurt, saw their share prices plummet in yesterday's trade.
Meanwhile dealers in Hong Kong said share prices there closed lower yesterday as caution re-emerged in late trade after the announcement by BNP.
Stocks had advanced significantly, but trading changed course when the news about BNP hit the market, wiping out the day's gains.
Hong Kong's key Hang Seng Index closed down 0.43 percent at 22,439.36 points.
BNP's move follows a similar decision last Friday by the German mutual fund Union Investment which froze one of its funds that has exposure to the US subprime market.
Ahead of the BNP announcement, Japanese share prices closed higher on Thursday. The Tokyo Stock Exchange's Nikkei-225 index of leading shares rose 0.83-percent to end at 17,170.60 points.
Chinese share prices gained, extending their record-breaking performance to a fifth day.
Meanwhile in European foreign exchange deals, the US dollar fell against the yen.
"Markets are taking this latest news seriously with the risk appetite on the back foot," said David Corbell, analyst at IFR Markets.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day