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Bull gored February 28, 2007

Posted by elizabethwong in Economy, Malaysia, Note2Self.

(Updated: Sydney time 1021H)

    Australian stock market in freefall
    Colin Kruger, Sydney Morning Herald
    February 28, 2007 – 10:21AM

    Traders react to the negative economic news on the floor of the New York Stock Exchange after the Jones industrial average fell more than 500 points.

    Australian stocks joined the worst share market rout since September 11 amid fears that China’s boom might be over.

    Australia’s major indices fell by more than 3 per cent when the markets opened this morning.

    Australia’s All Ordinaries index plunged by 212 points to 5773 at the 10.15am open this morning, wiping around $45 billion from the value of the Australian stock market.

    The benchmark S&P/ASX200 index had dropped 206.9 points to 5786.9.

    The White House is nervously watching financial markets, after Wall Street and European bourses plummeted dramatically.

    The fall was the worst to hit Wall Street since the September 11 attacks in 2001 and wiped out all of the market’s gains this year. (con‘t)


The KLCI stumbled yesterday, short of the predicted figure by Finance Minister Abdullah Badawi, more than 35 points, around 2.8%.

If this were contained within Malaysia, then one shouldn’t worry too much, if one had cashed out by last week. Perhaps a minor market correction wouldn’t hurt. Maybe cursed a little for believing Citigroup’s Monday headliner in Business Times about a ‘hot streak‘.

But markets were flayed all over the world on Tuesday. Shanghai Composite Index fell nearly 9%, its worst daily performance since February 1997, triggering HK’s Hang Seng slide of 1.8% and Japan’s Nikkei 225’s 0.5%.

One woke up this morning to this report on the BBC:-

    Global stock markets have slumped, with the US Dow Jones index plummeting by more than 400 points and London’s FTSE 100 index also posting sharp losses.

    The sell-off was sparked by a near-9% slide on the Shanghai Composite Index, as investors worried that China may pass rules to limit demand for stocks.

    The Dow Jones fell more than 500 points at one point, before closing down 416.02 points, or 3.29%, at 12,216.24.

    The FTSE 100 closed on a fall of 2.3%, or 148.6 points, to 6,286.1.

    Elsewhere on Wall Street, the technology-laden Nasdaq index closed down 3.86% at 2,407.87, while the S&P 500 index closed down 3.47% at 1,399.04.

    The New York Stock Exchange instituted trading curbs at 1303 EST (1803 GMT) in a bid to stem falls on the US stock market, although the move was not enough to prevent the Dow plunging by more than 500 points in late trading.

    European markets suffered as well, with the main indexes of the Paris and Frankfurt stock exchanges shedding about 3% each.

    Earlier in the day, Hong Kong’s Hang Seng index had ended trading on a loss of 1.8%, while Japan’s Nikkei 225 index slid 0.5%.

    “The sell-off in China continues to have a profound effect on stocks across the board, since the largest unwinding in the Shanghai Composite Index since 1997 leaves investors questioning the sustainability of stock gains everywhere,” said analysts at Briefing.com.

    The eyes of investors will now be on Asian markets to see whether the investor panic spreads. If that happens, European and US markets could face another round of sell-offs.

    ‘Sense of panic’

    Investor sentiment on Wall Street was also knocked by figures showing that US growth may be slowing down more than anticipated, with a government report earlier showing that orders for durable goods in January had dropped by the largest amount in three months.

    “As the afternoon has progressed, there seems to be a sense of panic among some professional investors,” said Andre Bakhos, president of Princeton Financial Group.

    “There seems to be just an air of nothing is safe anymore, there’s nowhere to go and people are rotating into bonds as a safe haven.” (con’t)

Jeff Ooi posted early this morning, that the first market to open in Asia, New Zealand’s NZX, tumbled 2.9%,

Of course I’m worried. Retail investors apparently aren’t the ones moving our KLCI, (so who is?) or at least they came in probably a couple of weeks ago, reading the Finance Minister’s target of 1,350 points as a rally til then. I doubt anyone saw this coming so soon.

I’d be biting my nails today, as I won’t have net access most of time. At least my IQ will be intact for the day.



1. panjang - February 28, 2007

it was an act of god.

2. bgtre - February 28, 2007

…Facts speak louder than words. Quality of life has prevalently plunged in of late, precipitated no doubt by surging costs and falling business opportunities. Against such backdrop, the government led ballyhoo, collaborated as always by the local media, in painting a booming economy came ironically as hard facts to swallow….
Source: http://malaysia-today.net/blog2006/guests.php?itemid=2744

3. zewt - February 28, 2007

it came earlier than expected. perhaps the ‘fund raising’ campaign is over. let’s hope we dont hear any suicide cases reported in our tabloids aka mainstream news.

4. kittykat46 - February 28, 2007

The party is over. The so-called Bull Run had nothing to do with economic fundamentals – just hot money, here today, gone tomorrow.
Dollah and gang tried to milk it for their “feel good” campaign, but lets see how they spin this.

5. zewt - February 28, 2007

there were some great rallies in the second half of the day… somebody somewhere sure made a big scoop!

6. elizabethwong - February 28, 2007

Finance Minister #2 told Reuters it was the state investment agencies which did the buying, and claimed it was due to valuation.
Will update more once I’m back.

7. shag - March 2, 2007

Live by stockmarket propaganda, die by stockmarket propaganda.

Our dear PM seems to have the investment sense of a retired makcik putting her EPF retirement fund into penny 2nd board stocks.

Buying into the KLSE when the CI is already on post-97 record heights and on the eve of Chinese New Year is utterly foolish. Advising people to do so is doubly foolish & borderline irresponsible.

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