Credit woes hammer US stocks again; ADRs not spared

MUMBAI: US stocks ended sharply lower Friday, as credit worries resurfaced and jobless data dampened sentiment. According to government reports, Non-farm payrolls grew by a lower than expected 92,000 in July, the lowest level since February. The jobless rate was expected to remain at 4.5%. The unemployment rate rose to 4.6%, the highest since January, economists were expecting payroll growth of about 133,000, according to a survey conducted.

Credit fears were reignited as CEO of Bear Stearns said the bond market turmoil may be a worse predicament than the bursting of the Internet bubble in 2000. Shares of Bear Stearns plunged over 6%, dragging down other stocks in the financial and brokerage sectors aswell. Citigroup, the biggest US bank, lost 2.7%, Wells Fargo & Co, the second-largest US home lender, also declined.

Wachovia Corp, the fourth-largest US bank, dropped 4% after announcing one of its units was temporarily pulling the plug on home loans falling between prime and subprime quality, until market conditions improve. Worries about credit also hit credit card companies on the theory that consumers struggling with mortgage payments would also fall behind on credit card debt. American Express shares fell 5.6%, while MasterCard dropped 8%.

Read more in The Economic Times

Crashes let big FIIs grab shares worth Rs676cr

Jitters in overseas markets sent the domestic bourses crashing twice in the past eight days, but foreign investors were busy grabbing stocks here seeing attractive buying opportunities after the 1,000-point plunge.

Some big names of the FII clan, including Merrill Lynch, Morgan Stanley and Citigroup, purchased stocks worth over Rs 676 crore between July 27 and August 1, when the market recorded its two biggest crashes of this fiscal.

Interestingly, most purchases were recorded on these two days only, even as the overall market sentiment was bearish following the 542 and 615-point fall in the benchmark Sensex.

An analysis of the bulk and block deals recorded on the stocks exchanges shows that foreign funds purchased shares worth Rs 676.32 crore in the period when the Sensex tanked over 1,000 points in two routs between July 27 and August 1.

Besides, the funds are believed to have purchased additional stocks in smaller quantities, but their exact estimates could not be known. Bulk deal refers to trading in a company's shares for over 0.5% of the total shares of the firm listed on the exchange.

Despite govt efforts inflation to remain: Citigroup

Inflation will continue to pinch consumers' pockets till May, by when the government's measures to bring down prices are expected to take effect in a wholesome way, analysts believe.

The rate of price rise soared to 6.46 per cent in the week ended March 3, primarily due to rise in vegetable and cement prices, the latest government data shows.

Read more at Financial Express