World Markets Plunge On Recession Fears

Equity markets around the world nosedived today (Friday) as fears of a global recession intensified.

At noon ET today (Friday), the blue-chip Dow Jones Industrial Average Index (^DJI) had plunged 267.46 points (-3.08%), to trade at 8,423.79. The tech-laden Nasdaq Composite Index (^IXIC) shed 34.67 points (-2.16%), to reach 1,569.24. And the broader Standard & Poor’s 500 Index (^GSPC) dropped 28.63 points (-3.15%), to hit 879.48.

The S&P 500 is 45% down from its peak.

“It’s a bear market on steroids,” David King, a money manager at Putnam Investments, who helps manage about $137 billion, told Bloomberg Television. “It’s very accelerated by the pace of financial markets today.”

In overseas markets, Japan’s Nikkei Index (^N225) had an 811.90-point decline to close at 7,649.08, its lowest level in over five years. Hong Kong’s blue-chip Hang Seng Index (^HSI) plummeted 1,142.11 points to close at 12,618.40, its lowest level since August 2004.

“The market is pretty desperate and at a loss. Four days running of big losses, though the turnover is quite low,” Howard Gorges, vice chairman South China Securities, told Reuters, speaking of the Hong Kong markets. The Hang Seng Index has dropped 55% so far this year.

“People are just standing aside. These are dangerous markets to play around with. That’s the main reason for getting into cash,” Gorges said.

In Europe, major indices sunk on news that the United Kingdom’s gross domestic product contracted more than expected with a decline of 0.5% in the third quarter.

The FTSEurofirst 300 Index of blue-chip European shares skidded 4.9% to close at 829.73 points, its lowest closing level since May 2003, Reuters reported.

The Paris-based CAC40 (^FCHI), London’s FTSE 100 (^FTSE), Madrid’s IBEX 35 (^IBEX) and the Frankfurt-based DAX (^GDAXI) all posted triple-digit losses.

At midday, the dollar had gained ground against the euro [up 1.60%] and the pound sterling [up 2.47%], but lost ground against the yen [down 4.37%].

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Comment by Dr. Sebastian Uremadu

2008-10-24 23:05:52

World Markets Plunge On Recession Fears: Comments

It is natural that people should just stand aside to watch the trend of the world markets as events are daily playing up in relation to ‘inpending’ world economic recession that sparked off in the USA since 2007. Investors are just naturally being risk averse, manifesting wait and see attitude until the unfolding scenario becomes very clear for them take positions. However, thereis nothing so much to fear in that I firmly believe that it will be extremely difficult for the world economy to collapse just like that at this point in time. Moreso, now thwt the G20 of industrialised nations are taking serious steps to ameliorate the bad situations.If Amerca and U.A. will fully cooperate with one another and would have good mutual understanding between them, definitely they will have much to offer to the entire world as they take the lead in carrying out some decisive financial adjustments and restructuring that will redefine the world economy today.Other nations of the world are not left out either in this battle rescue world financial system. With all hands on deck, I am optimistic that the world liquidity crisis will sooner tha later be over especal as China has a stock of huge foreign reserves to the magnitude of 1.9trillion US dollars. ( Dr SO Uremadu is a finance and economic seer in Nigeria).

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