At the beginning of the last session of the week, Asian markets were higher. One of the reasons for this situation is the announcement of Chrysler bankruptcy last evening.
Although American spot markets increased by about 2% during the day, almost all the gains were lost after Chrysler announced that it is planning to file for Chapter 11 of bankruptcy protection. The reason for bankruptcy is failure to agree with creditors before the deadline set by the American government. The market is not reacting critically, as it is believed that the auto-producer will become a part of the European car-maker Fiat.
Another fear that the market is currently facing is the possible further problems of GM Corporation, following the Chrysler Company in the next few months. The restructuring of the car giant will bear significant losses, particularly, about 2 million of jobs will be lost if General Motors declares bankruptcy.
Despite the negative news, the stock market reacted positively. S&P increased by 9.4%, biggest since 2000, increasing by 30% from its lowest level in March. The Japanese car-producers are considered to receive the biggest gains from the failures of American auto companies, as the Asian carmakers are already prepared to take a big portion of the market.