http://news.bbc.co.uk/2/hi/business/7662572.stm
Fear grips global stock markets
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Financial analyst David Buik: "We've got blind panic selling"
* Stock markets across Europe have fallen steeply after dramatic share
price falls in Asia. *
The FTSE 100 share index was down 8% at 3,964 points. It opened 9.8%
lower at 3887 points, below the 4,000-point level for the first time in
five years.
There were similar falls across Europe - Paris was down 8.4% while
Germany was down 9.1%.
Investors fear a global slowdown, despite interest rate cuts and huge
cash injections by central banks.
In other major developments:
* Tokyo's shares plunged 24% during the week, double their weekly
fall during the 1987 market crash
* Oil prices plummeted to a one-year low in European trading, with
the price of US crude oil falling below $83 a barrel.
* The three-month rate at which banks lend dollars to each other -
known as Libor - has risen to 4.8%
* Finance ministers from the G7 are to meet in Washington later and
President Bush is to make an address to the American people.
* Moscow and Jakarta stock markets remain suspended because of
excessive volatility
* Trading in the Vienna market was suspended until Friday afternoon.
Despite concerted government action, investors are increasingly fearful
the financial crisis will prompt a global recession.
=======
*The underlying illness remains in the system - as manifested in the
record amounts banks were charging each other yesterday for lending to
each other *
Robert Peston
BBC Business Editor
===========
"It's a banking problem, it's a credit crisis problem and it's a
complete loss of confidence worldwide," said David Buik of BGC Partners
in London.
The BBC's business editor Robert Peston said markets were worried about
Friday's auction of insurance claims on the debts of the collapsed US
investment bank, Lehman Brothers.
This could not come at a worse time for bank shares, said our
correspondent.
* 'Unstoppable selling' *
* * Heavy falls were seen across Asia's markets as a climate of fear
took hold on Friday.
In Japan, the Nikkei index slumped in its biggest one-day fall since the
1987 stock market crash.
The crisis also claimed its first Japanese financial institution, with
the insurance company Yamato Life going bankrupt.
"Selling is unstoppable in New York and Tokyo," said Yutaka Miura,
senior strategist at Shinko Securities in Tokyo.
"Investors were gripped by fear."
Elsewhere in Asia was a similar story.
In India, the Mumbai market plunged 6.5% in early trading. Shortly
afterwards, India's central bank said it would make an additional
$12.8bn (£7.5bn) available for the money markets.
Australian shares closed down 8.3%, Hong Kong's benchmark Hang Seng
index slumped to a three-year low while in the Philippines, share prices
closed down more 8.3%.
In Indonesia, plans to re-open the stock market were suspended in order
to prevent what the president of the exchange called "deeper panic".
Trading was halted for two days earlier this week.
* Crisis meeting *
The Dow Jones - the US benchmark index - ended down 7.3% on Thursday -
tumbling below 9,000 points for the first time since August 2003.
"We're way beyond fundamentals," said Chris Orndorff, head of equity
strategy at Payden & Rygel, in Los Angeles.
"This is just pure panic, that's all it is."
Finance ministers from the G7 leading industrial countries are set to
meet in Washington to discuss the crisis.
US President George W Bush is due to make an address to the American
people later in the day.
As well as the G7 meeting, talks will be held at the International
Monetary Fund (IMF) in Washington.
The IMF has said it is ready to lend to countries hit by the global
credit crunch, using an emergency lending procedure first used in the
1990s Asian crisis. It has about $200bn immediately available to lend
but can tap other sources.
*What kind of effect is the fall in share prices having on your life?
Are you worried about your pension or investments? What questions would
you like to put to the experts? Send us your questions using the form
below. *
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Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7662572.stm
Published: 2008/10/10 10:51:16 GMT
