LONDON/NEW YORK: The global financial crisis scuppered a $17 billion petrochemicals joint venture and drove three Japanese insurers into merger talks, while data from Europe showed the region’s economies face a bleak 2009.
Israel’s assault on Gaza added another element of risk to the mix yesterday, sending oil and gold prices higher and weighing down the dollar. “It’s a terrible situation and it just seems to be again causing major concerns for all the markets,” Peter McGuire, managing director at Commodity Warrants Australia, said of the Gaza violence.
Consumers, investors, central bankers and politicians are hoping to see some signs of recovery next year from the worst downturn since the 1930s as governments pump over $1 trillion into their ailing economies. However, it looks like being a long haul everywhere.
US stock indexes fell again as the collapse of a $17 billion joint venture between Kuwait and Dow Chemical threatened to unravel one of the large merger deals of the year and overshadowed gains in energy shares on rising oil prices.
This year will see one of the biggest ever stock market falls. The US S&P 500 benchmark was down 41 percent with three trading days left in 2008. Its biggest yearly drop was in 1931 in the Great Depression when it fell 47.1 percent.
Omani shares posted their biggest one-day gain in almost eight weeks yesterday on year-end positioning with investors snapping up blue-chips on the last trading day of the year.
The index ended up 4.4 percent, extending strong gains from the previous day, with Bank Muscat and National Bank of Oman both soaring more than 6 percent.
Markets in the United Arab Emirates saw a rally in real estate shares as investors also positioned themselves ahead of fourth-quarter results, with Dubai developers Emaar Properties and Union Properties surging 5.88 percent and 14.29 percent.
Abu Dhabi’s Aldar Properties and Sorouh Real Estate added 6.17 percent and 7.61 percent respectively.
Qatar’s index ended almost unchanged, while Saudi Arabia’s benchmark Tadawul All-Share Index (TASI) edged up 0.51 percent to close at 4,710.77. Markets in Kuwait and Bahrain were closed for holiday.
Three big Japanese insurance companies were the latest firms considering a merger to tackle a downturn that has hit demand for car and fire insurance in the world’s second-largest economy.
Shares of Mitsui Sumitomo Insurance Group Holdings Inc., Aioi Insurance Co. and Nissay Dowa General Insurance Co. surged yesterday on hopes that a merger would increase profits and reduce competition.
US light, sweet crude was up $1.16 at $38.87 a barrel by 1506 GMT, below a session high of $42.20. February Brent was up $2.92 at $41.29 by 1106 GMT.