Business | Markets
Markets bomb despite Central Banks' action
Stock markets were in turmoil after Wall Street opened with sharp losses before limping into positive territory.
- Agencies
- Published: 23:53 October 10, 2008
- At the Korea Stock Exchange the benchmark Korea Composite Stock Price Index plummeted 53.42 points to 1,241.47 on Friday. Volume was moderate at 449 million shares worth 6.22 trillion won ($4.54 billion), with losers outpacing gainers 758 to 104.
- Image Credit: EPA
London: Stock markets were in turmoil on Friday after Wall Street opened with sharp losses before limping into positive territory, only to plunge again on comments from US President George W. Bush.
The Dow Jones Industrial Average was down 3.62 per cent at 8,268 around midday while the Nasdaq exchange had lost 2.72 per cent to reach 1,600.39.
The Dow had been clawing back lost ground, after an earlier plunge of 7.9 per cent, until Bush blamed "uncertainty and fear" for much of the global financial meltdown and insisted US authorities had the tools to confront the crisis.
European stock markets suffered huge losses yesterday, with prices in London shedding almost 9.00 per cent, on fears that global financial turmoil had yet to run its course.
Sharpest daily plunge
The London FTSE 100 index of leading shares fell 8.85 per cent to close at 3,932.06, its sharpest daily plunge since the 1987 stock market crash.
In Paris the CAC 40 lost 7.73 per cent to finish at 3,176.49 while the Frankfurt Dax shed 7.01 per cent to end the week at 4,544.31.
Elsewhere there were declines of 7.14 per cent in Milan, 8.48 per cent in Amsterdam and 9.14 per cent in Madrid.
Worries are understandable but "anxiety can feed anxiety and that can make it hard to see all that is being done" to address the problem, Bush said, promising: "We can solve this crisis, and we will."
Market action came as world finance chiefs were preparing an emergency meeting in Washington. Interest rate cuts and billions of dollars' worth of cash injections by central banks failed to calm the mayhem.
"The crisis is now self-reinforcing and shows no signs of abating," said Chris Lafakis at Economy.com.
Tokyo nosedived, driving the Nikkei stock index down by 9.68 per cent, the biggest daily drop for two decades.
Hong Kong lost 7.2 per cent as panic swirled about the state of the global banking industry.
"Today looks to be starting off as a complete bloodbath. The FTSE was obliterated on the open," said Capital Spreads managing director Simon Denham in London.
He also warned investors: "Do not bet the house on a turn in the markets."
Back in Asia, the Tokyo market suffered the biggest loss in two decades, surpassing Wednesday's plunge of 9.38 per cent. The turmoil quickly spread to other Asian markets. Sydney plunged 8.3 per cent, Singapore lost 7.34 per cent and Seoul slid 4.1 per cent. Shanghai finished 3.57 per cent lower.
Indian shares closed down 7.07 per cent yesterday, despite an injection of liquidity from the country's Reserve Bank.
"It is ghastly," said Macquarie Equities associate director Lucinda Chan in Sydney.
Buying gold
"Investors are buying up gold. It's the only safe haven out there, otherwise it's red everywhere."
"The White House will hold a conference call with industry at 2.30pm today," a source said, asking not to be named because the call had not been made public by the White House.
"It'll be about the markets and the TARP," he said, referring to the government rescue plan, the Troubled Asset Relief Programme.
Do you understand what's going on in the financial world right now? Are you worried over your savings? Have you lost money? Can you offer advice?
Your comments
If one thing is certain it is not the time to be pointing the finger of blame at anyone for this terrible mess we are in and it is sure time for the Muslim world to start playing a leading role by formulating a new financial system to present to the world that is based on zero interest rate system and by paying out zakat to the poor. This can only be achieved by first revisiting their Islamic heritage finding the means to implement it in a new way and not by simply providing an Islamised copy/paste version of the conventional financial system that the world has so long been following. There is no better time for the world than now, since we have the financial means, the qualified scholars to do it and finally the need for new tools to fix this turmoil we are facing. The only challenge we will we face is our lack of required determination, but since this is not about us any more but is about a new brave world that the west has been trying so hard to call for.
Nizar
dubai,UAE
Posted: October 11, 2008, 14:15
The turmoil will have an end only when people try to live their life as per their actual earnings. Financial share markets will still face the similar situation unless people invest with the real intention of being a share holder and give priority to their company and not for speculation and gambling. The commodity market should limit its trading for only those people who have an intention to take the delivery of the items and not for institutions or people who does not want the item but want to invest on commodities which their existence are still in doubt at the time of investment
Nazeeh
Sharjah,UAE
Posted: October 11, 2008, 13:44
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