UPDATE - Coordinate rate cut does not calm stock markets

Thu, Oct 9 2008, 06:36 GMT
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FXstreet.com (Barcelona) – Stock markets worldwide closed yesterday with important losses, despite the coordinate rate by the main Central Banks to boost confidence, while the IMF warned about a the spreading financial crisis turning into a deeper than expected recession.

Asian markets experienced a considerable sell-out session with the Nikkei index declining about 9%, its biggest one-day decline in 21 years, while the Dow Jones fell 2.0% in its sixth consecutive day with losses. European Markets posted losses by 5.18% in London or 8% in Vienna.

In today’s Asian session, however, things seem to brighten up a bit, as the Nikkei Index has risen 1.25% in Morning trading, while the Bangkok Stock Exchange bouncing up gaining 66.84 points to 499.18. after three consecutive disastrous days.

The International Monetary Fund has praised interest rate cuts, as it has warned about the worsening of the global economic outlook, which threatens to push several advanced economies into recession.

In its World Economic Outlook, the IMF observes that "The world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s." The IFM has trimmed its growth expectations down to 3.9% in 2008, from the 4.1% previously expected, while the forecasts for 2009 have been downsized to 3% from the previous 3.9% estimations, the weakest growth rate since 2002.

US Economy seems to have improved slightly, according to the IMF, although its economy is expected to contract in the last quarter of 2008, while the expectations for the Euro Area have worsened considerably, with the area’s economic growth coming close to stagnation in 2009, to start recovering in the second half of 2009.

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