Australian stocks plunge

2 Dec 2008, 10:29 am   -   Source: SBS staff and agencies
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Australian markets open lower after news the US was in recession since 2007 (Getty)

Australian markets open lower after news the US was in recession since 2007 (Getty)

The Australian stock market has fallen over three per cent in early trade, after Wall St plunged overnight on news the US is in recession.

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The Australian stock market has fallen over three per cent in early trade, after Wall St plunged overnight on news the US is in recession.

The benchmark S&P/ASX200 dropped 123.3 points to 3,557.9 within 15 minutes of the market opening while the broader All Ordinaries was down 117.9 points at 3,501.1.

European markets were also sharply weaker, as the rally from last week came to a grinding halt after news of deeper economic woes in Germany, France and the full 15-nation eurozone and weak data from India and China.

Yesterday  the benchmark S&P/ASX 200 fell 61.3 points to 3,681.2 and the broader All
Ordinaries lost 53.7 points, or 1.5 percent, to 3,619.0.

Australian shares closed 4.3 percent higher Friday on across-the-board gains but the momentum failed to continue despite the Dow Jones Industrial Average closing last week up 102.43, or 1.17 percent, at 8,829.04 points.
 

US 'in recession' since 2007

Global markets are set to take a hammering after an economic panel has revealed the US is now another country to officially join the list of recession nations.

A private panel of US economists charged with the official designation of business cycles, the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) said it had determined the world's largest economy had been in recession since December 2007.

Although a recession is generally defined as two consecutive quarters of declining activity, the panel has its own criteria for determining a downturn.

US President George W. Bush's administration acknowledged the NBER conclusion and said it has been working to foster recovery.

"The most important things we can do for the economy right now are to return the financial and credit markets to normal, and to continue to make progress in housing, and that's where we'll continue to focus," White House spokesman Tony Fratto said.

In the US, with the auto sector teetering on the brink of collapse, the heads of the "Big Three" -- General Motors, Ford and Chrysler -- were to return to Congress this week to plead for a rescue package.

Embattled Ford said Monday it would consider selling its Sweden-based subsidiary Volvo Car.

In Japan, sales of new cars plunged 27.3 percent in November to 215,783 vehicles, the lowest since 1969, the Japan Automobile Dealers Association said.

Auto manufacturers in Europe also struggled. Sales of new cars plummeted an unadjusted 14 percent in November from a year earlier in France and 5.0 percent on a comparable number of working days.

The series of gloomy reports battered US and European stock markets.

Wall Street plunged, with the Dow Jones industrials falling 7.7 percent while the broad-market Standard & Poor's 500 index sank 8.93 percent.

A new set of grim figures pointed to a deepening recession in Europe, officials painted a grim outlook for Japan and a top auto chief warned of "massive" job losses in the auto industry.

Fresh data released on Monday showed German retail sales fell 1.6 percent in October from the previous month, while in France a closely watched index of manufacturing activity fell to 37.3 in November, its worst-ever reading.

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