Recession Reality: Hubris leaves markets like air out of punctured balloons
Whether the markets suffer more declines in the coming days could well hinge on figures due this week on US housing, incomes, gross domestic product and other indicators.
SHOOT: Rallies that happen now are all likely to be 'sucker's rallies'. But the hurricane season may prop up energy prices so if you're a gambler, buy energy related stocks now and wait for the hurricanes.
HONG KONG - Asian stock markets tumbled today, knocked by heavy losses on Wall Street after the World Bank warned of a sharper contraction in the world economy. European markets were lower in early trade.
Benchmarks in Tokyo, Hong Kong and elsewhere in Asia sank around 3% in a broad-based rout as the bank's gloomy forecast undermined hopes of a quicker end to the worst recession in decades. Crude oil prices and the dollar also declined.
Global markets have risen massively since March, with some like Hong Kong up nearly 60%, on signs the recession is leveling out and expectations of a return to growth in the US in the second half of this year.
But the World Bank issued new and much more pessimistic forecasts. It expects the world economy to shrink by 2.9% and warned that a drop in investment in developing countries will increase poverty. The bank's previous forecast was for a 1.7% contraction.