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World stock market rally runs out of steam

 A man walks in front of an electronic stock board of a securities firm in Tokyo, Japan, Wednesday, March 11, 2009. The benchmark Nikkei 225 stock ave...
 A woman walks in front of an electronic stock board of a securities firm in Tokyo, Japan, Wednesday, March 11, 2009. The benchmark Nikkei 225 stock a...
 A man walks in front of an electronic stock board of a securities firm in Tokyo, Japan, Wednesday, March 11, 2009. The benchmark Nikkei 225 stock ave...

Japan Markets

A man walks in front of an electronic stock board of a securities firm in Tokyo, Japan, Wednesday, March 11, 2009. The benchmark Nikkei 225 stock ave...

Japan Markets

A woman walks in front of an electronic stock board of a securities firm in Tokyo, Japan, Wednesday, March 11, 2009. The benchmark Nikkei 225 stock a...

Japan Markets

A man walks in front of an electronic stock board of a securities firm in Tokyo, Japan, Wednesday, March 11, 2009. The benchmark Nikkei 225 stock ave...

The rebound in the world's stock markets ran out of steam Wednesday amid ongoing concerns about the world economy _ illustrated by a sharp fall in Chinese exports in February _ and doubts about the sustainability of the rally.
In addition, the failure of U.S. Treasury Secretary Tim Geithner to flesh out details of his bank rescue plan reined in the euphoria that gripped the markets Tuesday after a letter from Citigroup chief executive Vikram Pandit to employees fueled hopes that the worst of the banking crisis may be over.
In it, Pandit said the bank posted its best operating profit in the first two months of the year since the third quarter of 2007, when it last booked a quarterly profit.
Though Geithner said the Obama administration will be in a position to unveil its banking plan in the next couple of weeks and that its aim will be to get markets operating again, the delay continued to weigh on investor sentiment. A month ago, Geithner announced the broad outlines of how the Obama administration will try and get the bad loans and other troublesome assets off the banks' books.
"It looks like it was a one day wonder, with residual concerns about the financial health of the banking sector and worries that China is suffering a hard landing," said Neil Mackinnon, chief economist at ECU Group.
"It underlines the volatility in the markets at present," he added.
After a bright opening, the Dow Jones industrial average was down 34.72 points, or 0.5 percent, at 6,891.77, while the broader Standard & Poor's 500 index fell 2.46 points, or 0.3 percent, to 717.14. Both had surged around 6 percent Tuesday on the back of the Pandit letter.
Meanwhile in Europe, Germany's DAX, which jumped around 6 percent on Tuesday, closed up another 27.12 points, or 0.7 percent, to 3,914.10, while the CAC-40 in France ended 10.52 points, or 0.4 percent, higher at 2,674.20.
Britain's FTSE 100 index though underperformed its counterparts in Germany and France, closing down 21.42 points, or 0.6 percent, at 3,693.81. The index was dragged down by banking company HSBC PLC, whose shares slid over 7 percent on the last day investors could buy into the bank's $18 billion discounted share issue. And ongoing concerns about whether Lloyds Banking Group PLC will end up having to be nationalized by the government saw its share price tumble another 14 percent.
Other banks continued to prosper in the slipstream of the Citigroup letter.
Barclays rose another 4 percent, while Deutsche Bank AG was up a further 8 percent. In the U.S., Citigroup rose a further 5 percent, and JP Morgan Chase & Co was up more than 3 percent.
Earlier in Asia, Japan's Nikkei index joined in the rally, having fallen to a 26-year low in the previous trading session. It closed 321.14 points, or 4.6 percent, higher at 7,376.12 on Wednesday. Meanwhile, Hong Kong's Hang Seng index rallied further, up another 236.61 points, or 2 percent, to 11,930.66.
Elsewhere in Asia, South Korea's Kospi rose 35.31, or 3.2 percent, to 1,127.51. Benchmarks in Australia and Taiwan were up 1.9 percent; Singapore's gained 1.3 percent. Mainland China's main market in Shanghai ended 0.9 percent lower at 2,139.03 after government figures showed Chinese exports slumped 26 percent in the year to February amid waning global demand.
Oil prices were lower, with light, sweet crude for April delivery down $2.29, or 5 percent, to $43.42 a barrel on the New York Mercantile Exchange. The contract fell $1.36 to settle at $45.71 a barrel overnight.
The dollar weakened 1.3 percent to 97.348 yen while the euro rose 0.8 percent to $1.2774.
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AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.


Updated : 2021-01-24 14:57 GMT+08:00