- January 22nd, 2008
- Posted by EUEditor
Sharp falls in share prices on European markets on Monday continued across the globe.
Markets in Australia closed 7.3% down on Tuesday (22.1.08); the value of local stocks fell by A$100-billion, the worst single-dayâ€™s fall since 1989, taking the market back to levels of 2006.
A Financial Times summary:
â€œTumbling Asian shares â€“ which continued to fall early on Tuesday â€“ led European stock markets into their biggest one-day fall since 9/11 as the prospect of a US recession and further fall-out from credit market turmoil prompted near panic among investors, who rushed to the safety of government bonds.
â€œAbout $US490-billion [A$572-billion; dcerates.com, 22.1.08] was wiped off the market value of Europeâ€™s FTSE Eurofirst 300 index and $148bn from the FTSE 100 index in London, which suffered its biggest points slide since it was formed in 1983. Germanyâ€™s Xetra Dax slumped 7.2 per cent to 6,790.19 and Franceâ€™s CAC-40 fell 6.8 per cent to 4,744.45, its worst one-day percentage point fall since September 11 2001.â€
Talk of a â€œsweeping sell-offâ€ and â€œcarnageâ€ on markets was picked up in one BBC commentary, asking whether a â€œBearâ€ market was now settling in — defined as a 20% drop in values against recent peaks:
â€œMany European markets are already in that territory, or very close.
â€œIn Paris and Milan the leading shares indexes are down more than 20% from recent peaks, while Frankfurt’s Dax is very close to that mark. The London FTSE 100 index is also close to being down more than 20% from its recent peak, hit in June last year.
â€œJapan was the first of the world’s big markets to enter bear market territory, notching up a 20% decline last November. Elsewhere in Asia and the Pacific region, stocks in Australia, India, Indonesia, Singapore, Taiwan and Thailand have all fallen at least 20% from recent highs.
â€œIn the US, the benchmark Dow Jones index is down 14% from its high hit in October last year.â€
Australian Stock Exchange Info.com (Home), 22.1.08. http://www.australianstockexchangeinfo.com/index.html, (22.1.08).
BBC, â€œShould we fear a ‘bear’ market?â€, 21.1.08. www.bbc.com/ â€¦ , (22.1.08).
Joanna Chung and Robert Orr in London, Andrew Wood in Hong Kong, â€œPanic sparks plunge in global marketsâ€, Financial Times, 21.1.08. http://www.ft.com/… , (22.1.08).
Emma O’Brien, â€œAustralia’s S&P/ASX Drops Most in a Decade, Enters Bear Marketâ€, Bloomberg.com, 22.1.08. http://www.bloomberg.com/ â€¦ , (22.1.08).