Asian woes hit western markets

FURTHER falls in Asian stock markets yesterday led to initial turmoil in western exchanges as widespread fears of a full global recession gathered momentum. Japan’s Nikkei slumped to a 26-year low.

However, while sharp losses were seen in early trading, most western markets spent the day rallying and managed to claw back part of the earlier declines.

London’s FTSE 100 slid by 0.8% yesterday to close at a little over 3,852 points and a five-year low.

The fall was a vast improvement, however, on earlier in the day, when it was down by as much as 5.6%. So far this month, the FTSE has fallen by 21%.

In France, the CAC 40 Index fell by 3.6%, led by heavy falls in the share prices of leading stocks including Electricite de France, Carrefour, France Telecom and Credit Agricole.

The DAX fell by 0.2%, leading German stocks downwards for the fifth straight day of trading. Prior to Europe opening yesterday morning, the Nikkei in Japan had closed down 6.45% to its lowest level since October 1982.

The Hong Kong market shed 12.7% in value yesterday after witnessing its biggest single-day collapse since the early 1990s.

For its part, the ISEQ — although down again by 3.19%, or 84.62 points to just over 2,565 — spent much of yesterday improving on earlier declines of nearly 5%. There was no bank holiday cheer for the financial stocks — AIB’s loss of 1c to €3.15 the least bit of damage done. Bank of Ireland was down by 13.75%, or 22c, at €1.38; Anglo Irish Bank lost 43c, or 23.46%, to close at €1.42 and Irish Life & Permanent shed 29.43%, or 63c, to fall to €1.52.

In other stocks, drinks group C&C fell by 10c to €1.08, Kerry Group lost 28c to close at €17.60 and Tullow Oil was down by nearly 2%, or 10c, to €5.75. The Irish aviation stocks had differing days — Aer Lingus rising by 1c to close at €1.04, while Ryanair shed 6.04%, or 16c, to close at €2.49.

Elsewhere, European Central Bank head Jean-Claude Trichet said a further interest rate cut at the next meeting of the bank’s governing council was possible.

“If we do so — I repeat, if — it would be because we would have judged that a further alleviation of inflation risks and a further improvement of inflation expectations fully justify the move,” he told an economic forum in Madrid.


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