World markets Markets plunge despite global rate cuts October 09, 2008 AFP
World stock markets have suffered another dizzying slide, with losses in Europe topping 8.0 per cent, as traumatised investors brushed aside central bank interest rate cuts aimed at boosting confidence.
After a calamitous day in Asia, Wall Street slid 2.0 per cent, with the Dow Jones Industrial Average in the red for the sixth consecutive session.
Losses in Europe ranged from 5.18 per cent in London to more than 8.0 per cent in Vienna. Markets in Oslo and Stockholm were down more than 6.0 per cent.
Major central banks launched an exceptional joint effort to battle the global financial crisis, simultaneously slashing interest rates on three continents.
The US Federal Reserve, European Central Bank, Bank of England and peers in China, Canada, Sweden and Switzerland slashed key rates by a half percentage point, sending their strongest signal of support since just after the September 11, 2001 terror attacks in the US.
"We are not out of the woods yet," warned City Index market strategist Joshua Raymond. "We will have to see whether this has any long-lasting effect on confidence.
"What is good to see is the central banks making a coordinated and proactive effort to combat what is now a global economic problem. The fear is that this should have come about a week ago."
Analysts at Bank Wegelin in Switzerland said "there is panic in all corners and suspicion in all its forms."
In New York, the Dow dropped 2.01 per cent to close at 9,257.15.
The blue-chip index has shed 14.7 per cent, or more than 1,600 points, in the past six sessions, including a loss of 500 points Tuesday to a five-year low.
The Dow has fallen more than 30 per cent in a year.
The tech-heavy Nasdaq composite index dropped a modest 0.83 per cent to 1,740.33 and the Standard & Poor's 500 index fell 1.13 per cent to 984.94.
Al Goldman at Wachovia Securities noted that confidence was the number-one problem in the market.
"This rate cut will not be an overnight cure-all but is a strong positive in the right direction," Goldman said.
"The good news is that the healing process has begun," he added.
But markets failed to get the message.
In London the FTSE 100 index of leading shares shed 5.18 per cent in turbulent trade to finish at 4,366.69 points while in Paris the CAC 40 fell 6.39 per cent to 3,493.70 points.
The Frankfurt DAX lost 5.88 per cent to 5,013.62 points.
Elsewhere there were declines of 5.51 per cent on the Swiss Market Index, 5.20 per cent in Madrid, 5.71 per cent in Milan, 7.36 per cent in Brussels and 7.68 per cent in Amsterdam.
Arab shares tumbled for the fourth day running but the Saudi bourse, the region's largest, rebounded after the international rate cut while the Egyptian market made up some ground.
Concerns mounted about the impact of the global financial crisis on the oil-rich Gulf, where the region's seven stock markets have lost more than $US30 billion ($A45 billion) dollars of capitalisation in the latest rout.
In Asia, Japanese Prime Minister Taro Aso said he was stupefied by the Tokyo market's slide, 9.38 per cent, adding he sensed "huge fears" in the public.
Hong Kong ended down 8.2 per cent and India's Sensex slid 3.14 per cent.
India's finance minister has insisted the country's economy and stock market were sound in a bid to reassure nervous investors worried about the fallout from the global financial crisis.
Finance Minister P. Chidambaram stressed that Indian banks were not at risk.
"No one need have any fear about the soundness of the Indian banking system," he told reporters, adding, "We will watch the situation carefully and continuously and respond swiftly. Steps will be taken to infuse more liquidity if required."
Trading was frozen on Russia's two main stock markets after plunges of more than 11 per cent on opening.
"No one knows for certain now what they can rely on," said Hironobu Hagi, deputy general manager at capital market division of Shinsei Bank.
"We're seeing panic selling. Once players see a sign of selling, everybody tries to jump on the bandwagon," he said.
In Latin America, Brazil's stock market closed lower for the third day running, with the Ibovespa index shedding 3.85 per cent to finish at a two-year low. Argentina's Merval index slipped 1.82 per cent.
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