World stocks slid to six weeks lows on Monday as the devastating toll of the earthquake in Japan, the tsunami and the nuclear crisis continued to unfold, raising fears for the impact on industries ranging from insurance to electricity generation.
Oil prices fell on expectations of slower demand from Japan, the world’s third largest economy and a major oil importer. Growing unrest in a Yemeni border Saudi Arabia, the world’s largest oil exporter, limited the decline in oil prices.
Japanese stocks posted their biggest daily drop since October 2008 in a record time volume as traders considered economic losses. The Nikkei index. N225 ended 6.2 percent and the broader Topix Index. TopX fell 7.5 percent.
The worst earthquake on record in Japan has raised concerns that global growth would be a setback as the global economy is emerging from the effects of the financial crisis hit. Japan is recovering costs 180 billion U.S. dollars, or 3 percent of its annual economic output and more than 50 percent higher than the cost of the 1995 Kobe earthquake summit, economists said.
“The earthquake could have significant impact on the global economic front,” said Andre Bakhos, director of market analytics at Lek Securities in New York. “If you quit Japan, there would be a global recession.”
Japanese gross domestic product to 1 trillion yen slide in 2011, or about 0.2 percentage point, Hiromichi Shirakawa, a Tokyo-based economist at Credit Suisse, said in a client note. But deteriorating consumer confidence and the reduction of production would decline in GDP of 1 percentage point much worse, he added.
Before the disaster, Shirakawa Japan, the estimated growth to 1.4 percent this fiscal year delay of 3 percent in 2010.
The U.S. dollar rebounded from near record lows against the yen after the Bank of Japan announced a series of policy measures aimed at easing bank of the economy.
Gold Rose, recovering some of the losses last week, as the Japanese earthquake and heightened unrest in the Middle East and North Africa rode safe haven buying, driving prices towards recent record highs.
The MSCI World stock index. MIWD00000PUS fell in North American trading, trading down 0.92 percent to levels last seen in late January. It is more than 4 percent in February peak. The Thomson Reuters Global stock index. TRXFLDGLPU shed 1.1 percent.
source:reuters
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