Europe shares calm after US falls

European shares have been steady in morning trading, despite hefty falls on markets in Asia and the US.

• The FTSE in London was down 0.1%, the Dax in Frankfurt traded down 0.6% and the Cac 40 in Paris dropped by 0.7%.
• Earlier, Japan’s Nikkei 225 had fallen 3.5% taking its lead from Wall Street, where the Dow Jones closed down 4.1%.
• Markets were hit by disappointment that China had not unveiled new stimulus measures on Thursday and fears that General Motors might not survive.
• Investors are also anxious ahead of the publication of unemployment figures in the US later on Friday.
• “[The] unemployment data is not going to be beautiful. Things are not going to improve quickly,” Lucinda Chan, at Macquarie Private Wealth in Sydney, told Reuters.
• Japan woes
• In Japan, exporters’ stocks tumbled on Friday, amid fears that the strengthening yen would make their products uncompetitive.
• The Nikkei closed down 260.4 points at 7,173.1.
• Shares in Honda Motor, the country’s second-biggest car company, fell 3.8%.
• Shares in Mizuho Financial Group, Japan’s second-largest bank, slipped 2.7%, taking their lead from sharp falls in Citigroup stock in the US, which fell below $1 for the first time on Thursday.
• “If you see fire breaking out in someone else’s house, it causes worries about your own, too. The latest development in the US corporate sector is very worrisome,” said YS Rhoo, a market analyst at Hyundai Securities in Seoul.
• US shares were knocked when auditors expressed “substantial doubt” that General Motors could stay afloat. Shares in the carmaker closed down more than 15%.
• ‘Signs of recovery’
• Investor hopes that China would expand its stimulus package had pushed markets higher earlier in the week, but shares fell around the world on Thursday when Premier Wen Jiabao failed to announced any expansion of the package.
• “The market had also hoped to hear news from China on new stimulus measures as it opened parliament yesterday, but nothing clearly came out,” Kazuhiro Takahashi at Daiwa Securities SMBC told AFP.
• Zhou Xiaochuan, China’s central bank chief, said on Friday that he saw signs of a recovery and that officials would act sooner rather than later to revive the economy.
• Hong Kong’s Hang Seng fell 289.7 points, or 2.4%, to 11,921.5.
• In Australia, the ASX 200 index 43.0 points, or 1.4%, to close at 3,145.5, which was its lowest close since August 2003.
• South Korea’s Kospi index recovered from falling as much as 2% during the day to close down only 0.3% at 1,055.0.
• The Sensex in Mumbai also recovered from a 1.8% early drop to trade up 134.9 points, or 1.7%, at 8,332.8.