Asian inflation and Europe debt crisis push stocks down by Zuzana Zelenakova

Stocks have been falling down after Chinese Prime Minister Wen Jiabao announced that China has to come up with some measures to battle inflation. Markets also fell after South Korea´s central bank raised interest rates to restrict growing inflation. "The fact that China is taking actions to tighten things up over there is having a big ripple effect here," said Bruce Simon, the chief investment officer at Ballentine Partners. Meanwhile, Ireland is still negotiating with European Union and International Monetary Fund financial aid package for its debt laden banks. “The market is not going to react very well because things are going to get worse before they get bet! ter,” said Sung Won Sohn, an economics professor at California State University- Channel Islands in Camarillo, California. “The sovereign financial crisis has not disappeared: it’s been postponed.” “At the request of the Irish authorities, an IMF team will participate in a short and focused consultation, together with the European Commission, and the ECB, in order to determine the best way to provide any necessary support to address market risks,” the Washington-based International Monetary Fund said in an e-mailed statement. Although European finance ministers have not agreed on bailing out Irish banks, they are definitely making steps to support financial system in Ireland and help it to recover. Even though Ireland´s situation is not the same as it was in case of Greece, which had to be bailed out by European countries and the IMF it has similar effects on markets. Both factors, inflation in Asia and debt crisis in Europe, have ca! used stocks to fell for a fourth day Tuesday. The Dow Jones in! dustrial average recorded its biggest one-day loss in three months. It fell 178.47, or 1.6 percent, to 11,023.50. The Standard & Poor's 500 index fell 19.41, or 1.6 percent, to 1,178.34. The Nasdaq composite index fell 43.98, or 1.8 percent, to 2,469.84.

related story (sgx18620): http://news.yahoo.com/s/ap/us_wall_street;_ylt=Ar_ODul2DKxrD...

by Zuzana Zelenakova for Cantell TV (http://cantell.tv)

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