European markets plunge again; Nikkei plummets

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(Agencies)
Updated: 2008-10-10 22:15

LONDON - European stock markets slumped in early trading Friday following massive sell-offs on Wall Street and Asia as lending rates between banks continue to rise despite this week's efforts by central banks to break the logjam in credit markets.

A passer-by walks past an electronic stock board in downtown Tokyo Friday, Oct. 10, 2008. [Agencies]

At mid-morning London time, the FTSE 100 index of leading British shares was down 233.84, or 5.4 percent, at 4,079.96, having fallen below the 4,000 mark earlier for the first time in five years. Germany's DAX was 383.70, or 7.9 percent, at 4,503.30, and France's CAC-40 was 209.67, or 6.1 percent lower at 3,233.03.

In Vienna, the stock exchange has been suspended until midday after stocks tumbled 10 percent at the opening bell, and in Russia representatives of the MICEX and RTS exchanges said they suspended regular trading until further notice under orders from financial regulators.

This week's coordinated interest rate cuts by the world's central banks to thaw frozen credit markets and boost investor confidence have fallen flat as markets remain gripped by fears about the scale and depth of the likely global recession.

"Overall it's the fact that 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 Matt Buckland, a dealer at CMC Markets in London.

"Again the LIBOR (London Interbank Offered Rate) rate at midday will be closely watched to see if there's any signs of easing here and it's going to be this plus the next stages of government intervention,that will dominate," he added.

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