Stocks slump, oil continues decline as recovery hopes dim

LONDON: Stocks fell, pushing the MSCI World Index lower for a fifth day, oil retreated and the yen gained on speculation Group of Eight officials meeting in Italy have little scope to combat the worst recession since World War II.

The MSCI World Index of 23 developed countries slipped 0.6 percent at 11:49 am in London, the longest stretch of declines since March. Oil slumped for a sixth day in New York, the worst losing streak since December, while the yen rose to a six-week high against the euro and the dollar. Russia's ruble fell 0.9 percent versus the dollar to the lowest level in seven weeks.

Leaders from the G8 most-industrialized nations met in L'Aquila, Italy yesterday to tackle shrinking economies and rising unemployment even after the US pledged $12.8 trillion to end the recession. Alcoa Inc's results kick off a US earnings season that will extend the stretch of profit declines for Standard & Poor's 500 Index companies to a record eight quarters, according to analysts' estimates compiled by Bloomberg. Japan's machinery orders unexpectedly fell, a government report showed yesterday.

"People had been overly optimistic that the recovery will be fast and V-shaped," said Nigel Rendell, a senior emerging- market strategist at RBC Capital Markets in London. "We're not convinced that will be the case. A lot of the value has disappeared out of these markets."

The Dow Jones Stoxx 600 Index of European shares slid for a fifth day, losing 0.5 percent. France's CAC 40 slipped 0.7 percent, extending its retreat since June 1 to 10 percent, the common definition of a "correction."

The MSCI Asia-Pacific Index slumped for a sixth straight day, losing 1.3 percent.

Holcim Ltd slipped 3 percent in Zurich after the world's second-biggest cement maker said it expects a "difficult" 2009. Amada Co fell 4.1 percent to a three-month low in Tokyo as Japanese machinery orders unexpectedly dropped 3 percent in May.

Futures on the S&P 500 fluctuated between gains and losses, adding as much as 0.4 percent and dropping 0.3 percent. The benchmark index for US equities tumbled 2 percent yesterday to the lowest level since May 1.

Aluminum for three-month delivery on the London Metal Exchange slid 1.6 percent today, trimming this year's gain to 3.4 percent. Nickel paced the decline in metals, slipping 2 percent to $15,340 a metric ton for a fifth straight drop.

Crude oil for August delivery fell 0.8 percent to $62.45 a barrel on the New York Mercantile Exchange.

The ruble depreciated to 31.8034 per dollar, leading a slide among all 22 emerging-market currencies tracked by Bloomberg except the Philippine peso. Russia's Micex index dropped 2.1 percent as oil producers OAO Rosneft and OAO Lukoil retreated.

Qatar's DSM 20 Index sank 3.6 percent and the Dubai Financial Market General Index fell 3.4 percent. India's Bombay Stock Exchange Sensitive Index lost 2.8 percent, entering a correction.

The MSCI Emerging Markets Index, a 22-country benchmark, dropped 1.4 percent to the lowest level in two weeks. Developing-nations' bonds sank, sending the extra yield investors demand to own the debt over US Treasuries 7 basis points higher to 4.41 percentage points, according to JPMorgan Chase & Co's EMBI+ Index.

Copyright and Exemption Declaration :¢ÙAll articles, pictures and videos that are marked with "China Aluminum Network" on this website are copyright and belong to China Aluminium Network (www.alu.com.cn). When transshipment, any media, website or individual must list the source from "China Aluminium Network (www.alu.com.cn)". We seek legal actions against anyone that disobey this. ¢ÚArticles that marked as copy from others are for transferring more information to readers, do not represent or endorse their opinions or accuracy and reliability. When other media, website or individuals copy from our website, must keep the source. Anyone that changes the articles' sources will hold the responsibilities for copyright and law problems. We also seek legal actions against anyone that disobey this. ¢ÛIf any articles copied by our website concern the copyright and other problems, please contact us within one week.