LONDON, Oct 10: US and European share prices suffered heavy losses on Friday, as fear stalked trading floors and frazzled investors looked to a meeting of G7 finance chiefs for salvation.
Stock exchanges were in turmoil after Wall Street opened sharply lower before limping into positive territory, only to plunge again on comments from US President George W. Bush.
European shares closely tracked the New York Stock Exchange, going into a frenzied free fall after the start of trade on Wall Street, briefly pulling back and then plummeting.
Asian shares earlier in the day were likewise hammered, with Tokyo giving up more than 9.0 per cent and Hong Kong 7.2 per cent.
In New York the Dow Jones Industrial Average was down 4.23 per cent at 8,216 points at mid-day while the Nasdaq exchange had lost 3.65 per cent to reach 1,585.02.
The Dow had been clawing back lost ground, after an earlier plunge of 7.9 per cent, until Bush’s remarks appeared to dampen sentiment.
European markets posted huge losses at the close of trade.
The London FTSE 100 index of leading shares fell 8.85 per cent to finish 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.
The fresh falls ended a calamitous week for world stocks during which, paradoxically, there were no major bank failures.
It was marked by several measures that had been actively sought by investors — notably the implementation of a bank rescue plan in the United States and a move by the world’s major central banks to cut interest rates.
Analyst Marc Touati of Global Equities said the market behaviour reminded him of “a spoiled child who doesn’t realise what his parents have done for him.”
The market, he added, was “so pessimistic that nothing can calm it.”
With tension at fever pitch, global finance chiefs were gathering in Washington for crisis talks, taking place amid a stunning loss of confidence in the global financial system.
The meeting brings together ministers and central bankers of the United States, Germany, Japan, France, Britain, Italy and Canada.—AFP
