Actions fail to halt global sell-off
Tuesday, 7 October 2008
LONDON, Oct 06(Agencies):Global stocks suffered sharp falls Monday, as worries about the extent of the crisis in the financial sector deepened after finance ministers failed to reach a consensus on how to react.
Asian and European stock markets plunged as government bank bailouts in the US and Europe failed to alleviate fears that the global financial crisis would depress world economic growth.
Investors took scant comfort from Washington's passage of a US$700 billion plan to buy bad assets from banks and other institutions to shore up the financial industry on Friday because of the uncertainty still hanging over the details of the deal and the degree to which it will help.
On Wall Street, the Dow Jones Industrial Average fell 3.3 per cent to 9.983.5, a drop of 332 points taking it under the 10,000-point mark for the first time since October 2004. The S&P 500 fell 2.4 per cent to 1,073.3.
London's FTSE 100 fell 7.9 per cent, or 393 points, to 4,587.2. The renewed fall took the benchmark index below its closing low point for the year to levels last seen in September 2004.
Germany's Xetra Dax 30 was 6.3 per cent weaker at 5,430.8 and the CAC 40 in Paris tumbled 6 per cent to 3,835.5. Overall, the FTSE Eurofirst 300 surrendered 6.5 per cent to 1,018.6, a loss of 70 points.
Germany Sunday agreed a 50 billion euros (US$68 billion) package to bail out Hypo Real Estate, the country's second-biggest commercial property lender, after a rescue plan by private lenders fell apart.
France's BNP Paribas SA committed to taking a 75-percent stake in troubled European bank Fortis N, and Sweden and Denmark followed Ireland and Britain in raising the amount of savers' deposits guaranteed by the government.
Across Asia, all markets were also in the red.
Tokyo's Nikkei 225 index fell to its lowest level in 4 1/2 years, sinking 4.25 percent to 10,473.09.
Hong Kong's Hang Seng index slid 5 percent to 16,803.76. Markets in mainland China, Australia, South Korea, India, Singapore and Thailand also fell sharply. Indonesia's key index plummeted 10 percent, it's biggest one-day drop ever.
In Asia, many indices closed at their lowest levels since December 2005 as worries about the extent of the damage done by the crisis intensified. The MSCI Asia-Pacific ex-Japan index was on track for its biggest daily decline since January 2008, down 5.3 per cent.
The Federal Reserve announced a series of steps to bolster liquidity in the credit and commercial paper markets, amid mounting pressure for more action following passage of the $700bn financial bailout last week.
The Fed said it would increase the size of its key TAF lending facility to commercial banks, pay interest on excess reserves to smooth liquidity operations, and allow money market funds to borrow via banks to fund their holdings of commercial paper.
The Fed added that it and the Treasury department were "consulting with market participants on ways to provide additional support for term unsecured funding markets".
One of London's single biggest fallers was once more the UK's biggest mortgage lender, HBOS, due to merge with fellow bank Lloyds TSB in a rescue deal put together during the crisis. HBOS fell 14.8 per cent to 170.8p and Lloyds lost 8.5 per cent to 255½p. Royal Bank of Scotland fell 14.3 per cent to 159.7p.
"Another Monday, another banking crisis. Just when the market thinks it has found a base level, there's another jolt to the system and we lose another 200 points off the FTSE 100. Black Mondays used to be a once-a-decade event - now they're coming along more regularly than a London bus," said Manoj Ladwa, senior trader at ETX Capital.
Asian and European stock markets plunged as government bank bailouts in the US and Europe failed to alleviate fears that the global financial crisis would depress world economic growth.
Investors took scant comfort from Washington's passage of a US$700 billion plan to buy bad assets from banks and other institutions to shore up the financial industry on Friday because of the uncertainty still hanging over the details of the deal and the degree to which it will help.
On Wall Street, the Dow Jones Industrial Average fell 3.3 per cent to 9.983.5, a drop of 332 points taking it under the 10,000-point mark for the first time since October 2004. The S&P 500 fell 2.4 per cent to 1,073.3.
London's FTSE 100 fell 7.9 per cent, or 393 points, to 4,587.2. The renewed fall took the benchmark index below its closing low point for the year to levels last seen in September 2004.
Germany's Xetra Dax 30 was 6.3 per cent weaker at 5,430.8 and the CAC 40 in Paris tumbled 6 per cent to 3,835.5. Overall, the FTSE Eurofirst 300 surrendered 6.5 per cent to 1,018.6, a loss of 70 points.
Germany Sunday agreed a 50 billion euros (US$68 billion) package to bail out Hypo Real Estate, the country's second-biggest commercial property lender, after a rescue plan by private lenders fell apart.
France's BNP Paribas SA committed to taking a 75-percent stake in troubled European bank Fortis N, and Sweden and Denmark followed Ireland and Britain in raising the amount of savers' deposits guaranteed by the government.
Across Asia, all markets were also in the red.
Tokyo's Nikkei 225 index fell to its lowest level in 4 1/2 years, sinking 4.25 percent to 10,473.09.
Hong Kong's Hang Seng index slid 5 percent to 16,803.76. Markets in mainland China, Australia, South Korea, India, Singapore and Thailand also fell sharply. Indonesia's key index plummeted 10 percent, it's biggest one-day drop ever.
In Asia, many indices closed at their lowest levels since December 2005 as worries about the extent of the damage done by the crisis intensified. The MSCI Asia-Pacific ex-Japan index was on track for its biggest daily decline since January 2008, down 5.3 per cent.
The Federal Reserve announced a series of steps to bolster liquidity in the credit and commercial paper markets, amid mounting pressure for more action following passage of the $700bn financial bailout last week.
The Fed said it would increase the size of its key TAF lending facility to commercial banks, pay interest on excess reserves to smooth liquidity operations, and allow money market funds to borrow via banks to fund their holdings of commercial paper.
The Fed added that it and the Treasury department were "consulting with market participants on ways to provide additional support for term unsecured funding markets".
One of London's single biggest fallers was once more the UK's biggest mortgage lender, HBOS, due to merge with fellow bank Lloyds TSB in a rescue deal put together during the crisis. HBOS fell 14.8 per cent to 170.8p and Lloyds lost 8.5 per cent to 255½p. Royal Bank of Scotland fell 14.3 per cent to 159.7p.
"Another Monday, another banking crisis. Just when the market thinks it has found a base level, there's another jolt to the system and we lose another 200 points off the FTSE 100. Black Mondays used to be a once-a-decade event - now they're coming along more regularly than a London bus," said Manoj Ladwa, senior trader at ETX Capital.