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Early London rally wiped out, European market volatile
by Sanjay Jha | October 7, 2008 at 12:43 am | 41 views | 2 comments | 4 recommendations
Stock markets across Asia-Pacific bounced back after huge losses for last many days in early trading. Several governments took desperate economic measures to survive the crisis. Indian government had cut down credit ratio and Australian's central bank cut interest rates by one percentage point.
To arrest outflow of foreign investors Indian government had further liberalized restrictions on foreign portfolio investment.
An early attempt at a rally on the London stockmarket swiftly evaporated this morning as investors were again gripped with fear following yesterday's slump - the worst day's trading in over 20 years.
Analysts had hoped for a relief rally, with speculation growing of concerted central bank action on global interest rates.
The FTSE 100 index of leading shares rose by 133 points, or almost 3%, in the first few minutes of trading. However it soon lost almost all the gains, with Britain's banks again slumping. Shares in Royal Bank of Scotland were down by 30%, with Barclays 8% lower and HBOS down by 6%.
Yesterday £93bn was wiped off the value of Britain's top 100 companies as the leading index plunged by 391.1 points - its third-worst daily decline in percentage terms ever.
There has been a late recovery in Asia thanks to a shock interest rate cut in Australia.
The Federal Bank of Australia astounded the markets by cutting interest rates by a full percentage point overnight, to 6%. The move raised hopes of combined action by the world's central banks to try to stimulate the global economy.
"We could see a relief rally today, with predictions that Australia's move could be the start of concerted action," explained Manus Cranny of MF Global Spreads.
"But if that is what the market is hanging its hat on, then it could be sorely disappointed," he added.
October 7, 2008 at 12:43 am by Sanjay Jha, 41 views, 2 comments
Most RecentMost Recommended Comments (2)
at 01:03 on October 7th, 2008
Sanjay Jha, I like this story. It's good stuff.
at 12:03 on October 7th, 2008
Sanjay Jha, I like this story. First time to hear India restricts outflow of money. Would be interesting to hear more from India economy with Indiatimes highlight or other india newspaper. We don't have that here. Thanks, I understand this right "outflow stopped" ?
Concerning Europe, I know from India it Is UK, of course. But now there is Europe with the Euro and the "offshore UK" with the pound. The euro will take it, the pound deeply involved in risky speculation, we see tommorow, Barkley's bank government sponored.
Also I would encourage the India writers to include some nice stories from hyderabad and the high tech world, or Mr. Tata etc., the family entrepreneurs. It would enrich our world view for sure more than another paulin story