European stocks plunged about 10% on panic sell-offs.
European equities plunged on Friday by about 10.0 per cent, after steep losses in Asia and the United States, as investors faced the 'perfect storm' of a mounting financial crisis and sharply slowing growth. -- PHOTO: REUTERS
LONDON - EUROPEAN equities plunged on Friday by about 10.0 per cent, after steep losses in Asia and the United States, as investors faced the 'perfect storm' of a mounting financial crisis and sharply slowing growth.
London and Frankfurt erased more than 10 per cent and Paris more than nine per cent as market mayhem showed no sign of easing, despite interest rate cuts and billions of dollars' worth of cash injections by central banks this week.
Wall Street set for global rout
NEW YORK - INVESTORS looked to extend the frenetic selling on Wall Street on Friday, adding to yet another global sell-off on concerns that even low interest rates won't help end the worsening credit crisis.
Dow Jones industrials futures plunged 250 points ahead of the opening bell in New York.
The British capital's FTSE 100 index of leading shares nosedived 10.20 per cent to as low as 3,873.99 points - the first time below 4,000 points since Jul 3, 2002 - and was 7.81 per cent down at about 6.45pm.
Frankfurt's DAX 30 also shed more than 10.0 per cent and in Paris the CAC 40 dived 9.68 per cent. They later nursed losses of 9.06 per cent and 7.99 per cent respectively.
'We have got to the capitulation stage where people are taking the combination of the perfect storm of a banking system in crisis and a global economy that is slowing quite dramatically,' said Mr Justin Urquhart-Stewart, marketing director at Seven Investment Management.
'Putting the two things together is creating something deeply unpleasant.'
'Although action has been taken on the banking system, no results have yet been seen ... which is probably too early to tell anyway, but it has created a lot of nerves.'
Markets crumbled before the Group of Seven finance ministers and central bankers were to meet in Washington to discuss worldwide markets turmoil.
Investors dumped shares across the globe in scenes reminiscent of the 1987 stock market crash.
'The last time I can remember this in the market was 1987,' added Mr Urquhart-Stewart.
Asian stock markets went into a tailspin on Friday, with Tokyo diving 11 per cent at one point as fears grew that the financial crisis is spiralling out of control, dealers said.
On Thursday, Wall Street's Dow Jones index plunged 7.33 per cent, closing below 9,000 points for the first time since 2003.
Elsewhere in Europe on Friday, Amsterdam was down 7.35 per cent, Brussels slid 5571 per cent, Dublin erased 4.67 per cent, Milan shipped 7.90 per cent and Zurich nosedived by 7.72 per cent in value.
In Austria, the Vienna stock exchange was suspended all Friday morning after several shares fell more that 10 per cent, and the index fell a further 10.97 per cent when it reopened.
CMC Markets dealer Matt Buckland said that central bank efforts this week had failed to unblock European interbank lending markets which have been slammed by the global credit crunch.
'Despite the huge fire fighting efforts of central banks worldwide we still haven't seen any thawing of interbank lending that is going to be causing the most concern now,' said Mr Buckland.
'US and European tax payers have collectively tried to dig the financial sector out of one almighty hole but the response certainly hasn't been as planned.'
Stock exchanges in the Nordic region also plunged more than seven per cent in opening deals on Friday.
Prague, meanwhile, shed 13.8 per cent after the opening bell and Athens was down 8.61 per cent.
The Bucharest stock exchange said trading there would not open until 9pm, which is half an hour before it closes, the Newsin agency reported, after heavy falls in shares. -- AFP
