This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Global Markets: Asia Slumps, Europe Resilient in Wake of Terror

Terror on U.S. soil brought tumult to world markets overnight as investors try to make sense of tragedies in New York and Washington.

As trading opened in London, the FTSE 100 Index dropped by 62 points to 4684 at the open, a new 35-month low. However, as the session continued, traders in Britain became less skittish, and the FTSE was trading up 1.1% to 4787 in late-morning trading.

Continental markets seemed to follow suit. In Frankfurt, the Dax slumped more than 50 points at the open and lost 1.5% early, but it quickly regained its footing, recently trading down just 0.25% at 4264.

In Paris, the CAC 40 lost nearly 3% as the market opened at 3943. That is on top of a 7.4% decline Tuesday, a 30-month low. In late-morning trading, the Paris market recovered and recently traded at 4055, largely unchanged from Tuesday's close.

Most European exchanges suspended trading in most U.S. equities Wednesday. And, European exchanges announced they will suspend trading for one minute at 8:45 a.m. EDT Wednesday to recognize a moment of silence for U.S. casualties from the terror that began about that time Tuesday morning.

Asian Markets Slump

Markets in Asia and the Pacific Rim opened sharply lower, but unlike Europe, never regained their footing as several rally attempts failed.

Tokyo's Nikkei closed with a loss of 6.6% at 9610, the lowest level since 1983 and the first time in 17 years that the Japanese benchmark has dropped below the 10,000 level. Major exporters like Toyota posted daily limit losses.

In Hong Kong, the Heng Seng Index also slipped below the 10,000 level, trading down 8.9% to 9494. Again, major exporters and firms with U.S. exposure led the decline, with Cathay Pacific Airways losing nearly 17%, bank and investment firm HSBC Holdings dropping 7.8% and Johnson Electric Holdings, a manufacturer of small electric motors and with major U.S export accounts, slumping 14.4%.

Other Asian markets followed suit. In Singapore, the Straits Time Index closed down 7.4%. The All Ordinaries Index in Australia was down 4.1%, and the Korean Kospi Index dropped 12% to 476. Exchanges in Taiwan and Malaysia remained closed Wednesday.

Traders across Asia and Europe came to work Wednesday aware that the chilling tragedy in the U.S. would jolt the world and, hence, the markets.

"The world has changed after this," Louie Bate, managing director of ING Barings Securities (Philippines), told Reuters. "Spending, travel and trade will change. People in the United States might not spend as much, and we were counting on that for a recovery."

Dollar Improves. Oil, Gold Give Back Gains

With U.S. central bankers asking foreign exchanges to limit trading of the dollar, thin trading helped the U.S. currency to recover from Tuesday's losses against European currencies.

Crude oil moderated after a sharp spike in the aftermath of Tuesday's terror. October Brent Crude, which traded as high as $31 per barrel Tuesday before settling back, last traded in London at $28.60 a barrel, off 46 cents.

Concerns over supply disruptions lessened as OPEC pledged to continue oil production and delivery Tuesday. And, in the wake of Tuesday's carnage, analysts are now focused on the potential for demand declines in the U.S.

There appears to be no threat of oil shortages, and the American Petroleum Institute said Tuesday that gasoline supplies were adequate to meet U.S. demand. Nevertheless, some gasoline stations are capitalizing on the moment with some Midwestern gas stations posting prices of $4 a gallon by late Tuesday.

Gold also gave back some of Tuesday's gains. Historically considered a safe haven in times of international turmoil, gold pushed as high as $290 an ounce Tuesday. In midday London trading Wednesday, gold traded at $285.
Christopher S. Edmonds is president of Resource Dynamics, a private financial consulting firm based in Atlanta. At time of publication, neither Edmonds nor his firm held positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While Edmonds cannot provide investment advice or recommendations, he welcomes your feedback and invites you to send it to Chris Edmonds.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%
YHOO $36.60 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs