Posted August. 18, 2005 03:05,
Stock prices in major European and American markets plunged amid growing concerns over the adverse impact of surging oil prices.
The U.S. Dow Jones Industrial Average Index dropped 120.93 points or 1.14 percentage points from the previous day, ending at lower than the 10,600 level. The NASDAQ index hit its lowest in four weeks.
The British FTSE 100 Index lost 21.9 points or 0.41 percentage points and the French CAC40 Index and German DAX30 Index also remained weak.
The Asian market was no exception. Markets in Korea, Taiwan and Japan also ended lower on August 17. According to statistics released by the U.S. Department of Labor on August 16, consumer prices climbed 3.2 percentage points year-on-year in July, the highest in three months. Consumer prices in Britain also rose 2.3 percentage points, recording the highest gain in eight years.
Higher consumer prices have resulted in lower profits of companies. Wal-Mart, the worlds largest retailer, announced that the company recorded the lowest quarterly net profit growth in four years for the second quarter of this year (April to June). This signifies that American consumers are reining up on their spending.
Last month, American automobile production dropped 2.3 percentage points compared to the previous month, due to the surging gasoline prices.
The Ministry of Industry, Commerce and Energy decided on August 17 to introduce the weekly No-Drive Days system to the public sector including governmental and public companies.
Furthermore, if oil prices continue to rise, the government is planning to convert the voluntary energy saving measures currently employed by the private sector into mandatory procedures.