Indian stocks up after key vote

Indian stocks have risen by more than 5% after the government won a vote of confidence that could pave the way for key economic reforms.

The Bombay Stock Exchange's benchmark Sensex index climbed 5.2% to 14,840.8 points, before slipping to 14,616.91.

The broader National Stock Exchange, rose 4.5% to 4,432.

Officials said the vote would clear the way for the liberalisation of rules on foreign investment in private banks and insurance firms.

As well as ensuring the survival of the ruling coalition, the vote of confidence also paves the way for a controversial civilian nuclear reactor deal with the US.

Indian shares have been fluctuating in recent weeks, prompted by investor fears over inflation and the uncertainty over the survival of the federal government.

'Biggest challenge'

"The market never likes uncertainty, so in that sense the end of the political uncertainty has brought in a feel good factor," said Arun Kejriwal, strategist at research firm KRIS.

"The government now has an opportunity to push through some reforms but whether they will actually be able to do it, I am not too sure."

According to the BBC's Sanjoy Majumder in Delhi the nuclear deal is expected to unlock billions of dollars in investment over the next two decades.

However, he said that attempts by Manmohan Singh's government to push through crucial economic bills, which will permit greater foreign investment in banking and insurance, would be tougher.

He added that the government's biggest challenge would be to manage voter discontent over growing inflation, now at nearly 12%, prompted in part by rising oil prices.

Pakistan shares end 15-day slump

Pakistan's main share index closed slightly higher on Friday, breaking a run of 15 consecutive days of falls.

It followed Thursday's emergency late session at which brokers bought 4.5bn rupees ($64m; £32m) of shares from investors desperate to exit the market.

There had been violent protests earlier on Thursday from angry investors who smashed stock exchange windows while calling for a temporary trading halt.

The KSE 100 share index ended Friday up 21.8 points, or 0.2%, at 10,234.78.

Pakistani shares have been falling steadily since the new government came to power three months ago.

Investors are concerned about whether the government will be able cope with the country's inflation, or its trade and budget deficits.

The KSE 100 index has fallen 12.5% this week and is down 35% from its record high reached in April this year.

Protest over Pakistan share slump

Angry investors have attacked the Karachi Stock Exchange (KSE) in protest at plunging Pakistani share prices.

More than 200 people took part in the demonstration at the country's main stock exchange in the southern city.

A number of windows were broken and at least two people injured, Reuters news agency reports.

The protesters demanded a temporary closure of the KSE to stop further slides. It is down 14% since Monday and reached an 18-month low this week.

There were smaller protests in the cities of Islamabad and Lahore, where demonstrators burned tyres near the local exchanges.

A growing company and consumer debt burden and surging inflation have led to a crisis of confidence in Pakistan's economy, analysts say.

Concern has also been fuelled by political infighting between the new coalition government and its allies, as well as growing US pressure on the authorities to crack down on Islamic militancy in the country.

Smashed windows

The small investors who gathered in the main hall of the Karachi Stock Exchange were alarmed by stock prices falling for the 14th day in a row.

By about midday (0600 GMT) on Thursday share values on the KSE had fallen more than 4%, or 433.51 points, to 10,058.37.

The rupee also dropped by 1.3%, continuing a slide which has seen it lose 16.9% of its value against the dollar so far this year.

Investors in Karachi demanded a temporary halt to trading.

When this was denied, some went on the rampage, smashing windows and lights until they were dispersed by police.

"We are looking at the situation and there is no question of suspending the market," Razi-ur-Rahman, chairman of Securities and Exchange Commission of Pakistan (SECP), told Reuters.

The BBC's Barbara Plett in Islamabad says there has been a slump in investor confidence amid doubts that Pakistan's newly-elected government can deal with economic challenges like run-away inflation and wide trade and budget deficits.

The authorities have inherited much of the problem from the previous government, and that has been compounded by high world oil and food prices, our correspondent says.

But economists say lack of leadership from the weak coalition is one of the main risks to macroeconomic stability.

"What is needed at this point, is aggressive action from the government to lift sentiment," Shuja Rizvi, director of broking operations at Capital One Equities, told Reuters.

FTSE 100 ends week in bear market

London's index of key shares, the FTSE 100, has closed in "bear market" territory after another tough day for shares in Europe and the US.

The FTSE 100 lost 145 points, or 2.7%, to end at 5,261.6 points. A bear market is often defined as a 20% fall from a stock index's recent peak.

Friday's closing price is more than 20% below its June 2007 peak of 6,732.

Markets have struggled amid concerns about the world economy and the impact of slower growth on company earnings.

"The movement this afternoon was a clear indication that we haven't reached the bottom and the bears are still fully in control," said Angus Campbell, head of sales at Capital Spreads in London.

Banks hit

High oil prices, which hit a fresh record above $147 a barrel earlier on Friday, have also undermined investor confidence.

In Paris, the Cac 40 share index ended the day down 3.1% at 4,100.64 points, while in Frankfurt the Dax finished 2.4% lower at 6,153.30.

On Wall Street, the blue-chip Dow Jones index ended down 1.14% at 11,100.54 points on heightened fears over the financial health of the nation's two largest mortgage firms.

Shares in Fannie Mae and Freddie Mac ended down 22% and 3% respectively in volatile trading, with both counters plunging as much as 50% shortly after the open.

In London, banks were among the biggest losers, with Royal Bank of Scotland down 8.5%, Standard Chartered sliding 7.8%, and HBOS shedding 1.8%.

No let-up in global stocks slide

Global stock markets have suffered a sell-off sparked by concerns about the global economy and crude oil prices which have hit a new record.

New York's Dow Jones closed down 0.93%, or 106.9 points, at 11,346.51 as the cost of oil rose to a fresh high above $142 a barrel.

Losses were mirrored across the Atlantic, as share indexes in Paris and Frankfurt ended about 0.6% lower.

But London's FTSE shrugged off earlier losses to register a 0.2% rise.

Stock markets across Asia fell - earlier China's benchmark Shanghai index dropped by 5.3%, while India's Sensex index declined by 4.3%.

Indexes in Japan, Taiwan and South Korea all shed more than 2%.

Crude oil surged to a record, as Brent crude jumped to $142.13 a barrel, while New York light crude climbed as high as $142.26, on concerns about supply.

The global stock market downturn began in New York on Thursday, when the Dow fell more than 3% to a two-year low.

The fear on Wall Street is that rising prices and tighter finances will force Americans to curb spending and push the economy into recession.

Consumer concerns

Traders brushed aside positive news about US consumers on Friday.

The US economic stimulus package, which will hand out $107bn to Americans this year, boosted household budgets and helped consumer spending rise 0.8% last month.

But analysts are not convinced May's feelgood factor will last.

"We have had very strong consumer spending, but most of the tax rebates went into savings, which might mean they are going to stay there," said Pierre Ellis, an economist at Decision Economics in NewYork.

Investors also reacted to a string of bad news about key sectors of the US economy, while worries remain about the credit crunch and sub-prime fallout.

Asian stocks slide on record oil prices, US slump

Asian stocks tumbled on Wednesday with Japanese shares falling 1.65 percent after Wall Street took a beating in the wake of a fresh record for crude oil prices.

The Japanese market closed in the red as oil prices homed in on 130 dollars per barrel after rising overnight in New York to new records, stoking concerns that rising inflation will hit consumer spending and crimp business profits.

Worrisome inflation data, black gold's feverish onward march and a cloudy outlook for corporate earnings hit US shares Tuesday, with the Dow Jones Industrial Average sinking more than 1.5 percent.

Investors on Wall Street were "reminded of uncertainty about how the credit crisis will affect the economy," said Yoshikiyo Shimamine, the chief economist at Dai-Ichi Life Research Institute in Tokyo.

The US is battling a house price downturn and default crisis among subprime -- or riskier -- mortgages, which has inflicted huge financial losses and led to a global credit crunch, with the US expected to drag world growth lower.

Elsewhere in Asia on Wednesday, Chinese share prices tumbled 1.87 percent by afternoon trade, Australia closed down 1.4 percent and South Korea fell more than one percent.

Singapore, Hong Kong and India were pushing towards losses of one percent while Taiwan closed down 0.59 percent.

"The sharp fall on Wall Street overnight dragged down local shares," said Dickie Wong, an associate director at Friedmann Pacific Investment in Hong Kong.

The poor performance in Asia followed steep falls on Tuesday, including a tumble of nearly 4.5 percent in China, where investors are still digesting the consequences of the devastating May 12 earthquake in Sichuan.

Beijing has estimated the massive quake will cost industries based in Sichuan some 9.6 billion dollars. State media has said the deadly quake is set to cut China's 2008 economic growth by at least 0.2 percentage points.

The red numbers in Asia also come after a sharp rally since mid-March, which had raised hopes investors were becoming more sanguine about the financial crisis and the problem of surging food and fuel costs.

But experts said the difficulties in the global economy appeared to have come the fore again.

"We had a good rally and now the markets are focusing on inflation," said K Ajith, an analyst at UOB Kay Hian in Singapore. "Inflation is not a new issue but the continued rise in oil prices is making the market nervous."

Many of Asia's smaller markets also suffered Wednesday, with the Philippines ending nearly one percent lower and Indonesia trading down nearly 1.5 percent.

cketing oil prices renewed inflationary concerns," said Jose Vistan, research director at AB Capital Securities in the Philippines.

"The fundamentals point to even higher oil prices, and making matters worse is the speculative element as funds are now flowing into commodities," he said.

The IMF has estimated that losses from the credit crisis and US subprime debacle could spiral to nearly one trillion dollars.

Recent data have showed that economies in Asia, including Japan, expanded in the first three months of the year, but expectations of a US-led global economic slowdown continue to shadow investors.