Asian, European Stocks Plunge
The British stock market the FTSE 100 showed a loss of 3.97 percent at 0745 GMT. Asian markets too suffered tremendously on Monday: Tokyo’s Nikkei 225 index fell to its lowest level in 4 1/2 years, sinking 4.25% to 10,473.09. Hong Kong’s Hang Seng index slid 4.3%t to 16,927.87. Markets in mainland China, Australia, South Korea, India, Singapore and Thailand also fell sharply.
And then there is Russia: the RTS stock index plummeted more than 7%t in first 20 minutes of trading.
There is also good news: the prices of oil fell as well. The bad news: that’s because investers believe recessions are on their way, meaning that demand for oil will decrease significantly.
Analysts believe that the bailout plan may have passed U.S. Congress, but that investers fear the crisis is spreading and will continue to spread nonetheless.
“The Fed’s bailout plan may have been passed on Friday but so far there’s been no real reaction in credit markets and because of this the natural assumption is going to be that the measures won’t work, even if such a call is rather premature,” CMC Markets dealer Matt Buckland said on Monday.
Investors were also worried by the latest reports coming from America: 159,000 jobs were lost in the month of September and the U.S., the latest economy report said, could very well slide into a recession.
“This credit crunch looks like it’s not going away any time soon,” said Alex Tang, head of research at brokerage Core Pacific-Yamaichi in Hong Kong. “Apart from a credit crunch in Europe, investors are quite concerned about the worsening outlook on the U.S. economy.”
