World stocks extend freefall on recession fears
Thu, Oct 16, 2008
AFP
LONDON, ENGLAND - Mounting fears of global recession hammered world stocks Thursday, with Tokyo suffering its worst loss in two decades and Europe in freefall for a second day running after a brutal selloff on Wall Street.
Renewed panic erupted in trading rooms, with Tokyo closing down more than eleven percent and European indices briefly shedding almost 6.0 percent in early deals.
Wall Street's major indices endured losses of between 7.9 and 9.0 percent after a dismal US retail sales report stoked fears that the credit crunch would push some of the world's biggest economies into deep downturns.
"Don't stand in front of the freight train," Sonray Capital Markets chief economist Clifford Bennett warned investors. "This is clearly a panic with further to go. The equity market game has fundamentally changed."
Japan's Nikkei ended down 11.4 percent, wiping out most of its gains earlier in the week. It was the index's second-largest percentage loss ever and the steepest fall since the "Black Monday" crash in October 1987.
Elsewhere, Seoul sank 9.4 percent by the close and Sydney tumbled 6.7 percent. Hong Kong was down 7.6 percent by noon Shanghai had fallen 3.7 percent. The heavy losses set Europe up for another bad day.
Nearing a hour after the start of European trading, London was down 3.0 percent, Frankfurt shed 4.06 percent and Paris lost 3.25 percent.
A global recession was the markets' biggest fear, said CMC Markets head of trading James Foulsham in Australia, describing the day as "another shocker."
The Dow sank 7.87 percent Wednesday after US retail sales fell much more than expected and Federal Reserve chairman Ben Bernanke said a recovery from the financial crisis would not happen right away.
In India, where stocks slumped almost six percent in early trade, one broker described the market as "a bottomless pit."
Oil prices continued to fall, with Brent North Sea crude dropping below 68 dollars a barrel for the first time since June 2007.
World stock markets have fallen heavily this year as the global credit crisis brought down once-mighty Wall Street giants Bear Stearns and Lehman Brothers and prompted a raft of government bailouts of troubled Western banks.
The Dow has fallen 35 percent in 2008, the Nikkei has lost 45 percent and the London FTSE 100 is down about 37 percent.
"The stock market is buried by recession fears," said Al Goldman at Wachovia Securities.
US retail sales slumped 1.2 percent in September, a sign of deeper troubles for an economy hit by the squeeze in credit and the worst financial crisis since the Great Depression.
San Francisco Federal Reserve president Janet Yellen said the US economy was probably already in recession.
Most analysts say a US recession appears virtually certain, as a crippling credit crunch and housing meltdown drags down the rest of the economy despite a 700-billion-dollar banking sector rescue plan.
In Brussels, European Union leaders meeting for a summit warned that the financial crisis was far from over and that the real cost to jobs and growth was only now becoming clear.
The leaders of the Group of Eight (G8) major economies pledged in a joint statement to hold a global financial crisis summit "in the near future" with other key countries.
Leaders of the G8 - Britain, Canada, France, Germany, Italy, Japan, Russia and the United States - are "united in our commitment to fulfill our shared responsibility to resolve the current crisis," they said.
Gulf stock markets fell at the start of trading, led by the Dubai Financial Market, which dived more than six percent.
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Thu, Oct 16, 2008
AFP
LONDON, ENGLAND - Mounting fears of global recession hammered world stocks Thursday, with Tokyo suffering its worst loss in two decades and Europe in freefall for a second day running after a brutal selloff on Wall Street.
Renewed panic erupted in trading rooms, with Tokyo closing down more than eleven percent and European indices briefly shedding almost 6.0 percent in early deals.
Wall Street's major indices endured losses of between 7.9 and 9.0 percent after a dismal US retail sales report stoked fears that the credit crunch would push some of the world's biggest economies into deep downturns.
"Don't stand in front of the freight train," Sonray Capital Markets chief economist Clifford Bennett warned investors. "This is clearly a panic with further to go. The equity market game has fundamentally changed."
Japan's Nikkei ended down 11.4 percent, wiping out most of its gains earlier in the week. It was the index's second-largest percentage loss ever and the steepest fall since the "Black Monday" crash in October 1987.
Elsewhere, Seoul sank 9.4 percent by the close and Sydney tumbled 6.7 percent. Hong Kong was down 7.6 percent by noon Shanghai had fallen 3.7 percent. The heavy losses set Europe up for another bad day.
Nearing a hour after the start of European trading, London was down 3.0 percent, Frankfurt shed 4.06 percent and Paris lost 3.25 percent.
A global recession was the markets' biggest fear, said CMC Markets head of trading James Foulsham in Australia, describing the day as "another shocker."
The Dow sank 7.87 percent Wednesday after US retail sales fell much more than expected and Federal Reserve chairman Ben Bernanke said a recovery from the financial crisis would not happen right away.
In India, where stocks slumped almost six percent in early trade, one broker described the market as "a bottomless pit."
Oil prices continued to fall, with Brent North Sea crude dropping below 68 dollars a barrel for the first time since June 2007.
World stock markets have fallen heavily this year as the global credit crisis brought down once-mighty Wall Street giants Bear Stearns and Lehman Brothers and prompted a raft of government bailouts of troubled Western banks.
The Dow has fallen 35 percent in 2008, the Nikkei has lost 45 percent and the London FTSE 100 is down about 37 percent.
"The stock market is buried by recession fears," said Al Goldman at Wachovia Securities.
US retail sales slumped 1.2 percent in September, a sign of deeper troubles for an economy hit by the squeeze in credit and the worst financial crisis since the Great Depression.
San Francisco Federal Reserve president Janet Yellen said the US economy was probably already in recession.
Most analysts say a US recession appears virtually certain, as a crippling credit crunch and housing meltdown drags down the rest of the economy despite a 700-billion-dollar banking sector rescue plan.
In Brussels, European Union leaders meeting for a summit warned that the financial crisis was far from over and that the real cost to jobs and growth was only now becoming clear.
The leaders of the Group of Eight (G8) major economies pledged in a joint statement to hold a global financial crisis summit "in the near future" with other key countries.
Leaders of the G8 - Britain, Canada, France, Germany, Italy, Japan, Russia and the United States - are "united in our commitment to fulfill our shared responsibility to resolve the current crisis," they said.
Gulf stock markets fell at the start of trading, led by the Dubai Financial Market, which dived more than six percent.
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