Wall Street sell-off hits European, Asian shares
Global stock markets mostly went down Wednesday as a recent sharp rally on hopes of an economic recovery made way for profit-taking by investors.
In late morning trade, London's FTSE 100 index shed 0.63 percent to 3,887.21 points, Frankfurt's DAX 30 dropped 0.30 percent to 4,174.82 points and in Paris the CAC 40 lost 0.23 percent to 2,867.91.
"Last night's heavy sell-off on Wall Street just ahead of the close could again be stirring up a degree of unease amongst traders," said Matt Buckland, a dealer at online trader CMC Markets.
Wall Street fell heavily Tuesday as investors retreated from a sizzling stock rally a day earlier fuelled by a new US government plan to clean up toxic assets in the banking system.
The Dow Jones Industrial Average sank 1.49 percent to close at 7,659.97 points, as selling pressures intensified late in the day following Monday's surge of 6.84 percent for blue chips.
Japanese share prices ended narrowly mixed Wednesday with the Nikkei dropping 0.10 percent as investors took profits following the recent rally to a 10-week high, dealers said.
The Nikkei-225 index fell 8.31 points to 8,479.99. The broader Topix index of all first-section shares rose 0.71 percent to 818.49 points.
Many investors locked in gains after the market soared about 20 percent from a 26-year low seen earlier this month, lifted by hopes that the US economy will start to recover later this year.
"It's natural to see profit-taking after the recent surge," Yukio Takahashi, a market analyst at Shinko Securities, told Dow Jones Newswires.
Stock markets had rallied Monday as US President Barack Obama's administration announced a public-private sector programme to help the ailing banking system recover from massive losses suffered in the US housing meltdown.
Fred Dickson at investment firm DA Davidson & Co. said Tuesday that investor anxiety remained high and caution is increasing as US companies prepare to deliver their quarterly results and await the impact of US rescue plans.
The US Federal Reserve has lowered its federal funds rate to a range of zero to 0.25 percent in an effort to reopen frozen credit markets. It is also pumping 1.15 trillion dollars into the economy.
In Europe on Wednesday, HSBC said it could axe up to 1,200 workers in Britain as Europe's biggest bank reacts to the financial crisis.
"There are difficult decisions that have to be made as we adapt to a new environment and ensure we are well positioned for the future," said HSBC managing director Paul Thurston.
"The operating environment for banks in the UK is extremely challenging and will remain so for some time," he added.
HSBC, which employs 58,000 workers in Britain, said the plan to cut two percent of its workforce there would hit its IT and human resources operations.
HSBC is a big player in Asia, where stock markets closed mixed on Wednesday. Hong Kong ended down 2.07 percent after two days of strong gains, Shanghai shed two percent and Singapore dropped 0.86 percent.
But Sydney won 0.82 percent, boosted by gains for energy and financial stocks, dealers said, while Mumbai jumped 2.08 percent.