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World's Stock Markets Plunge
World stock markets suffered one of their worst days ever Monday amid fears that government responses to the global financial crisis, including the U.S. bailout and inconsistent moves by European leaders, would not be sufficient to prevent a worldwide recession. The day opened with heavy losses in Asia and the Middle East, followed by record losses in Europe and sharp drops in Latin America before the closing bell finally sounded to end another dismal day on Wall Street. Central banks continued to pump billions of dollars into money markets in hopes of unlocking seized-up credit markets. The Bank of England will inject an additional 40 billion pounds, equivalent to about $70 billion, on Tuesday, according to Alistair Darling, Britain's chancellor of the exchequer, or finance minister. Australia's central bank on Tuesday cut its benchmark lending rate by a full point, to 6 percent, in its biggest rate cut in more than 16 years, the Associated Press reported. The news sent the country's stock market up nearly 2 percent in early trading. Meanwhile, the Bank of Japan left its key interest rate unchanged Tuesday. Tokyo's two main indexes fell to their lowest level in nearly five years. The Nikkei average was off 4.25 percent, and the broader Topix was down 4.67 percent. Markets in Hong Kong and Shanghai lost 5 percent of their value, and the Mumbai exchange was down more than 4 percent. Saudi Arabia's stock market, the Arab world's largest, suffered one of its worst trading days on record, falling 9.81 percent. Even the exchange in Dubai, the Persian Gulf's roaring boomtown, ended 7.6 percent down. In Europe, where ad hoc government responses to the crisis continued to confound investors, the Paris CAC 40 index finished down 9 percent, its largest single-day loss ever. London's FTSE 100 dropped 391 points, or 7.85 percent, its largest one-day drop since 1987. In Frankfurt, Germany, the DAX index was down 7 percent. Russia's leading stock markets suffered record one-day losses, with the MICEX index losing 18.6 percent and the RTS 19.1 percent. Alarmed Russian officials were forced to halt trading on both exchanges to prevent an even worse free fall. "It's a bit like swimming," Digby Jones, a British government economic official, told the BBC. "You don't know where the bottom is, whether it's a foot below you or 10 feet below you." Posted by: Fred 2008-10-08 |
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