http://business.guardian.co.uk/story/0,,2023982,00.html#article_continue
Third day of market turmoil Nick Fletcher Thursday March 1, 2007 Guardian Unlimited Frayed nerves on the New York Stock Exchange today. Photograph: Mark Lennihan/AP Leading shares notched up a third day of losses today after further remarks from Alan Greenspan spooked the markets and Wall Street opened sharply lower. Mr Greenspan, the former chairman of the Federal Reserve, was quoted as telling a meeting in Tokyo by satellite link that a US recession was possible, although not probable this year. Similar comments he made earlier this week helped send share prices lower around the world. His latest comments follow attempts yesterday by current Fed boss Ben Bernanke to soothe fears about US growth. After an early rise, the FTSE 100 index of leading shares - which fell 148.6 points on Tuesday after a plunge in the Chinese market and 114.6 points yesterday - fell another 55.5 points to 6116.0 by the close. It has had £80bn wiped off its value in the past three days. At one point the index was down more than 130 points as the Dow Jones Industrial Average slumped 200 points almost as soon as it opened. But better than expected US manufacturing figures for February helped calm some of the frayed nerves as the Dow was down just 20 points by the time London shut. Traders pointed out that all the gains made by the FTSE 100 so far this year have now been wiped out. Karen Olney, European equity strategist at Merrill Lynch, said the falls were an overreaction but fund managers were worried about being caught out. "When people see a sea of red they get nervous," she said. "There is a revolving door and only so many people can get out." As well as the concerns about economic growth she pointed to uncertainty about the investments in the riskier areas of the markets by hedge funds. "A lot of hedge funds were short of the yen, which is now going up, and if they get caught out they have to unwind other positions immediately," she said. If the experience of last May's market shakedown is anything to go by, she added, the current uncertainty was more likely to last weeks and months rather than days, with investors plumping for defensive stocks such as food companies, healthcare businesses and retailers. The sell-off in global stock markets began with a 9% fall in China's main stock market - the Shanghai Composite Index - on Tuesday, on fears of a new tax. Despite being the source of the crash, most analysts believe there is little reason to panic about a slump in the Chinese economy. [Non-text portions of this message have been removed] ------------------------ Yahoo! Groups Sponsor --------------------~--> Check out the new improvements in Yahoo! Groups email. http://us.click.yahoo.com/4It09A/fOaOAA/yQLSAA/uTGrlB/TM --------------------------------------------------------------------~-> Post message: [EMAIL PROTECTED] Subscribe : [EMAIL PROTECTED] Unsubscribe : [EMAIL PROTECTED] List owner : [EMAIL PROTECTED] Homepage : http://proletar.8m.com/ Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/proletar/ <*> Your email settings: Individual Email | Traditional <*> To change settings online go to: http://groups.yahoo.com/group/proletar/join (Yahoo! ID required) <*> To change settings via email: mailto:[EMAIL PROTECTED] mailto:[EMAIL PROTECTED] <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
