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World markets - 18 February 2005
February 18, 2005
Pacific rim
Hong Kong - Asian stock markets closed mixed yesterday after comments by Federal Reserve chairman Alan Greenspan suggested the US economy was doing well but that US interest rates would continue higher, dealers said.
Japanese share prices closed 0.16 percent lower in the face of seasonal selling by institutional investors aimed at locking in profits towards the end of the fiscal year to March 31, dealers said.
They said stocks dependent on domestic demand also came under pressure after the release on Wednesday of data indicating Japan had been in recession for most of 2004, although these data were disputed.
Hong Kong share prices closed 0.34 percent lower on profit taking in select blue chips and on interest rate concerns.
Australian share prices closed 0.37 percent higher as BHP Billiton continued to lead the resource sector forward, dealers said. The company's shares gained 2.8 percent.
Jakarta hit another record, while Manila bounced back quickly from the upset of a downgrade by Moody's Investors Service on Wednesday.
Europe
Paris - European shares closed flat yesterday, off earlier session highs, as concern over future economic and monetary conditions offset gains in blue chips L'Oréal and Reed Elsevier.
An unexpected drop in US weekly jobless claims failed to soothe worries about the economy as some analysts noted these numbers were not matched by an increase in net hiring.
Repeated comments from central bank chairman Alan Greenspan that US interest rates remained "fairly low" also fanned worries that sharp monetary tightening could smother economic growth.
"Markets seem to have taken the hint that Greenspan remains completely committed to the notion of taking US rates higher to quell any risk of higher inflation," said David Brown, an economist at Bear Stearns.
Beauty product manufacturer L'Oréal rose 2.3 percent after reporting a 10.3 percent rise in annual profit. Publisher Reed Elsevier also reported a profit increase, and added 6 percent.
Credit Suisse gained 2.7 percent after its fourth-quarter net profit topped expectations.
US
New York - Shares had swung lower by midday yesterday after some of the market's enthusiasm was sapped by a forward-looking report that cast some doubt about the outlook for the US economy.
The backdrop in early trade was positive after the government said US jobless claims dipped 2 000 last week to 302 000, a four-year low.
But the Conference Board index of leading economic indicators for January, designed to forecast economist trends six to nine months ahead, fell 0.3 percent, suggesting the economy was being pressured by high energy prices, a weak dollar and business caution.
Analysts said the cautious mood might also be a delayed reaction to comments by central bank chairman Alan Greenspan, who on Wednesday said he was perplexed by low bond market rates at a time when the central bank was hiking interest rates.
Wal-Mart advanced 0.2 percent after reporting a 16.2 percent jump in fourth-quarter profits. Competitor Target advanced 0.6 percent after its results topped forecasts.
Radio Shack tumbled 9.6 percent after its quarterly earnings missed analyst forecasts.
-Reuters-AFP
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