By James Langton
(September 24 – 09:00 EST) – Yesterday’s market weakness reverberated
through Asia overnight. It has continued more modestly in Europe. The S&P
futures are modestly down too.
The sell-off has been blamed on Steve Ballmer, Microsoft’s president, who called all tech stocks overvalued. His comments broke through assorted psychological barriers that sparked sell signals all over the Street, driving the selling momentum hard.
Asian markets followed Wall Street’s late-day sell-off yesterday with a strong opening plunge of their own. Japan’s Nikkei average fell 4% on the open, but some buyers rallied it back off that low. The Nikkei closed off by 454 points, or about 2.5%. Hong Kong’s Hang Seng index shed 182 points too, following the weakness everywhere else and continued Yen fears.
Over in Europe the bearish tone is relatively moderate. The German DAX has dumped 100 points so far and the CAC 40 is down about 56 points in Paris, these are between 1% and 2% declines.
In the U.K., markets have been buoyed by a proposed mega-merger in the banking sector. The Bank of Scotland PLC has made a £20.9 billion bid for National Westminster Bank PLC. NatWest, which is almost twice the size of Bank of Scotland, views the bid as hostile. The possible deal has sparked a lot of interest in the financials. With the strength in the financials the FTSE 100 is only off about 24 points this morning.
Another big deal is apparently in the works in the U.S. telecom sector. In the long-distance arena, number two, MCI WorldCom Inc. is reportedly in talks to acquire number three, Sprint Corp. AT&T Corp. is the biggest player in the group, and the merged firms would rival it.
Manulife Financial finally debuts on the TSE today. It’s the largest of the demutualizing life insurers.