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LONDON: Asian and European stock markets were subdued
on Friday at the end of a highly volatile week for global equities
amid stubborn investor jitters over the US banking results season.
World markets were rocked this
week by turmoil in the American financial services sector after the
rescue for mortgage finance firms Fannie Mae and Freddie Mac, and
the collapse of bank IndyMac.
Later Friday, all eyes will be on
quarterly results from banking titan Citigroup, which has been hit
hard by the collapsed subprime or high-risk home loan market in the
United States.
Wall Street had roared higher for
a second straight day on Thursday as investors cheered tumbling oil
prices and positive results from JPMorgan Chase.
After the close, however, Merrill
Lynch announced a quarterly net loss of $4.89 billion.
Merrill was also forced to write
down more than nine billion dollars in soured investments, largely
linked to bets on US mortgage investments that have been hit by a
horrific housing slump after years of sizzling growth.
“The news [from Merrill] looks
set to temper equity markets, undoing the comparatively good news
from JPMorgan and Bank of New York,” said Calyon analyst Stuart
Bennett on Friday.
“Attention will remain on
financial sector results today, with Citigroup reporting ahead of
the US open. After Merrill’s figures the market is likely to be
wary in the run up to the release.”
Europe had rallied strongly on
Thursday after severe falls that were attributed largely to anxiety
about strains in the US financial system.
The mood was also lifted by
tumbling oil prices, which have fallen heavily this week due to
prospects of a global economic slowdown that could dampen future
energy demand, traders said.
In Asia on Friday, Tokyo shares
lost 0.65 percent, as investors cashed in ahead of a three-day
weekend in Japan, where Monday is a public holiday.
“Selling pressure emerged in
the afternoon as players turned out to be cautious ahead of a
three-day holiday,” said Masatoshi Sato, a senior strategist at
Mizuho Investors Securities.
--AFP
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