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Friday, December 12, 2008

World markets drop on rejection of US auto bailout

News from BLOOMBERG, BIZ Thestar, and from Myself!!

IMPORTANT please. It will be strike to other sector!! Becarefull and SAFE TRADING!! WATCH OUT it could be week from collapse, so don't buy automotives sector stocks!!

The bankruptcy of any of the big American automakers would deal another blow to the world’s largest economy, already in recession, and ripple through export-dependent Asia, as well as global financial markets.

"The automobile sector is a fundamental industry for both the U.S. and Japan, and a failure would be a major blow to Japan as well,’’ said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities in Tokyo. “The bailout failure is just the beginning.’’

Wall Street was poised to fall as well, with Dow Jones industrial index futures down 224 points, or 2.6 percent, at 8,373 and S&P 500 futures down 31.30 points, or 3.6 percent, to 843.20.

Hopes for the US auto industry now appear to rest with President George W. Bush agreeing to tap a $700 billion Wall Street bailout fund to aid the carmakers. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.

”If a company such as General Motors filed for Chapter 11 bankruptcy protection it could strike the Dow below 8,000 again,’’ said Jackson Wong, investment manager at Tanrich Securities in Hong Kong.

‘Chain Reaction’ to another country

Japan’s Nikkei 225 stock average tumbled 484.68 points, or 5.6 percent, to 8,235.87, and Hong Kong’s Hang Seng index slid 5.5 percent to 14,758.39.

In Europe, Britain’s FTSE 100 was down 2.7 percent at 4,271.85, Germany’s DAX was down 3.6 percent and France’s CAC 40 slid 4 percent.

Daimler lost 4.8 percent to 23.90 euros and Bayerische Motoren Werke AG fell 1 percent to 22.22 euros.

Honda, Japan’s second-largest automaker, tumbled 12 percent to 1,921 yen, the largest drop since Oct. 31. Hyundai Motor Co., South Korea’s No. 1 automaker, fell 9.3 percent to 42,000 won.

Indonesian biggest automotives stock ASII down 8.8 percent and hit MA30 line, it could be worst!!