Global Bourses Sink Again After US Indices Fluctuate

Updated: Jul 27 2002, 05:30am hrs
Gloom swept across European and Asian stock markets again on Friday, as worries grew about the global economic rebound and Wall Street looked set for more losses.

Switzerland, trying to weaken its currency in the face of slowing economic growth, cut interest rates.

The dollar strengthened against the Japanese yen - on signs that US fund managers were selling Asian shares and was slightly higher against the euro. Bond prices rose, knocking yields, as investors sought a safe haven.

“Someone forgot to tell the bear to hibernate and it is out with a full vengeance,” said Tom Hougaard, chief market strategist at City Index. “It seems there is a general flight out of stocks into fixed-income instruments.”

US stock index futures were lower by midday in Europe indicating another unsettled start for Wall Street. The brief bout of euphoria on battered share markets earlier in the week, triggered by a hefty rally in New York on Wednesday, evaporated after Wall Street returned to its losing ways on Thursday.

Traders said the 3.9 per cent drop on New York’s tech-heavy Nasdaq index had dampened optimism from the Wednesday session when US blue-chips soared nearly 500 points. But Nasdaq’s technology shares could get a boost after Qualcomm Inc. posted earnings late Thursday that beat market estimates and forecast full-year revenues and earnings at the high end of its prior guidance.

Shares in Qualcomm, which makes wireless technology equipment that let mobile phone users surf the web, swap pictures and download music, were up 60 cents a share in pre-opening trade, at $27.25.

New worries also emerged about the state of the US and European economies. The US Government reported on Thursday, that durable goods orders in June fell 3.8 per cent.

A key measure of German business confidence unexpectedly fell, Dutch firms scaled back forecasts for the third month in a row and British June retail sales hit a two-year trough.

On Friday, the London-based Centre for Economic Policy Research said that its indicator of economic growth in the euro zone had declined in June from the previous month for the first time this year, although it was still positive. The FTSE Eurotop 300 index of pan-European blue-chips fell more than two per cent and the narrower DJ Euro Stoxx 50 index lost more than three per cent.

Key French, German and British indices were all down sharply.