World stock markets slid Thursday and the dollar fell, undermined by worries about the global recovery after Federal Reserve Chairman Ben Bernanke warned the U.S. economy faces uncertain prospects.
Bernanke told a congressional committee that the economic outlook is “unusually uncertain” and the economy is fragile. He did not forecast that it would fall back into recession. The dollar dropped against the yen and the euro, reflecting pessimism about America’s economy, the world’s largest.
Some analysts worry that slowing economic growth in developed countries in the second half will also undermine Asia, which led recovery from the global recession.
“We’re bearish for the rest of the year,” said Tey Tze Ming, a trader at Saxo Capital Markets in Singapore. “We have a bleak economic outlook on the U.S. and Europe, and it’s hard to see Asian stocks doing well in that context.”
As trading got underway in Europe, Britain’s FTSE 100 retreated 0.2 percent, Germany’s DAX fell 0.3 percent, and France’s CAC-40 was down 0.4 percent. Futures augured moderate gains on Wall Street, with Dow futures up 44 points, or 0.4 percent, to 10,102.00.
In Asia, Japan’s Nikkei 225 stock average slipped 0.6 percent to 9,220.82 while South Korea’s Kospi fell 0.8 percent to 1,735.53. Australia dropped 0.9 percent to 4,374.70 and markets in India, Thailand, Indonesia and Malaysia were also lower.
China’s Shanghai benchmark index rose 1 percent to 2,562.41 on bargain hunting after several days of losses. Hong Kong’s Hang Seng index gained 0.5 percent to 20,589.70.
Bernanke’s comments sent the Dow Jones industrial average down 1.1 percent to 10,120.53 on Wednesday, while the broader Standard & Poor’s 500 index fell 1.3 percent to 1,069.59. Interest rates dropped in the Treasuries market as investors sought a safer haven.
In currencies, the dollar slipped to 86.60 yen from 86.93 yen in New York late Wednesday. The euro rose to $1.2836 from $1.2763.
Benchmark crude for September delivery was up 3 cents to $76.60 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.02 to settle at $76.56 on Wednesday.
The Associated Press.
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