Friday, July 15, 2011

ASIA-Shares face weak start on growth fears

WELLINGTON: ''Asian stocks will likely struggle on Friday, as Federal Reserve Chairman Ben Bernanke hosed down suggestions of more near-term stimulus for the struggling U.S. economy.

Speaking to the Senate Banking Committee Bernanke said it was not yet time for more stimulus, while warning a U.S. debt default would cause havoc on financial markets, and heavy cuts to government spending could derail a recovery in the world's largest economy.

The main Wall Street indices shed between 0.4 percent and 1.2 percent, with investors uncertainty in the wake of Bernanke's comments pushing the CBOE Volatility Index, up 4.5 percent to a two-and-a-half week high.

It also overshadowed a solid result from JPMorgan Chase & Co, who rose 1.8 percent after it reported higher-than-expected profit as it wrote off fewer bad mortgages and credit card loans.

Asian stocks listed on Wall Street fell 0.8 percent while world stocks, as measured by the MSCI world equity index, were 0.7 percent lower.

British shares slipped 1 percent while European shares fell 0.8 percent, as rising euro zone debt worries in the wake of an Italian bond auction rattled financial stocks.

Gold prices pushed to a record high as fears for the economic outlook rattled investors, already on edge over the euro zone debt woes and Moody's warning over the U.S. credit rating.

The U.S. dollar regained some of the ground lost this week after Bernanke's comments, climbing out of a four-month trough against the yen .

The weakening currency will cheer Japanese markets, which have held above major support, although foreign investors are seen possibly trimming long positions ahead of a long weekend in Japan. Nikkei futures traded in Chicago 10 points above the last closing level in Osaka.

Australian stocks are set to struggle as commodity prices slid 1.3 percent on economic fears. Share price index futures are at a 32.7 point discount to the close of the underlying S&P/ASX 200 index. ' Reuters


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