On Monday, most of the U.S. and European stocks witnessed a slow growth or remained static as the debt crisis was still lingering over Europe.
In Europe, Euro zone finance ministers held a meeting in Brussels to find out ways to stabilize their currency union and avoid further expensive bailout. Finance ministers from 16 European countries took part in the meeting. The governments looked very determined to solve the debt crisis while discussing to create a new pan European bond and increase bail out fund. At the end of the meeting, they did not announce any new step. After a five-hour meeting, all 16 euro zone finance ministers agreed on the view that existing emergency fund is big enough to tackle the situation. They informed that they could not broach the proposal for Euro Zone bonds. The uncertainty over the debt crisis will continue on Tuesday, while 27 EU finance ministers will again hold a meeting. They will again discuss on economic conditions of Portugal and Spain on Tuesday after having talks with managing director of International Monetary Fund, Dominique Strauss-Kahn on Monday.
European Central Bank announced special liquidity support for banks to ease the situation and said that it would purchase bonds issued by the government. On Monday, the bank announced that it had increased its purchases to euro1.95 billion for the week ended Nov. 30, the highest in months. The ministers know that any means to revive the stock market condition would be useless unless the main problems like high debt and low economic growth are addressed.
On the weekend, Bernake said that if necessary, to promote economic growth, the U.S. central bank is willing to purchase more than $600 billion in Treasury bonds over the coming eight months. This process is known as quantitative easing. The move has increased the optimism of investors. This step might raise an influx of money into the Asian markets, when their economies are developing and investors want better returns.
Bernanke's comments helped investors to get rid of concerns produced by increased unemployment rate which touched seven months high of 9.8 percent. Bernanke also received criticisms for increasing inflation rate, and weakening the US dollar with enormous purchasing of Treasuries.
Response of Global Markets on Monday:
UK's FTSE lost 0.43 percent to 5,770.28, while Germany's DAX moved up 0.10 percent to 6,954.38. France's CAC40 moved down a bit around 0.04 percent at 3,749.23.
DOW JONES INDUS AVG moved down by 0.17 percent at 11,362.20, and the Standard & Poor's 500 index fell 0.13 percent at 1,223.12. Most of the Asian indexes show degradation.
In Asia, Japan's Nikkei 225 lost 0.1 percent to 10,167.23. Japanes exporters including auto-manufacturers lost their base after negative employment rate publicized by US Labour of Dept.
China's benchmark Shanghai Composite Index displayed slight progress of 0.5 percent to 2,587.17.
South Korea's Kospi moved down 0.2 percent to 1,953.64, and Australia's S&P/ASX 200 fell 0.1 percent to 4,688.6. Benchmarks in New Zealand, Singapore and Taiwan advanced.
The dollar displayed strength against Euro, as the debt crisis is lingering over euro zone. The dollar was trading up 0.1 percent at 82.7 yen.
