European markets plunge again; Nikkei plummets

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

The latest woes in Europe came after the Dow Jones index in the US closed 678.91 or, 7.3 percent lower, at 8,579.19, its first close below 9,000 in five years. The slide on the Dow was partly fueled by the decision of credit-rating agency Standard & Poor's to review its rating on General Motors Corp.

The Dow's seven-day decline of 20.9 percent is the largest since the seven-day plunge ending Oct. 26, 1987, when the Dow lost 23.8 percent. That sell-off included Black Monday, the Oct. 19, 1987 market crash that saw the Dow fall nearly 23 percent in a single day.

In Japan, the benchmark Nikkei 225 index in Japan dropped 881.06 points, or 9.6 percent, to 8,276.43, its lowest closing level since May 2003. It was its biggest one-day percentage loss since the stock market crash of October 1987 and meant that the Nikkei lost nearly a quarter of its value during the week.

"Investors were gripped by fear," said Yutaka Miura, senior strategist at Shinko Securities in Tokyo.

Finance ministers and central bankers from the Group of Seven industrialized nations are due to meet later Friday in Washington to address the financial meltdown but analysts are skeptical that they can do anything to soothe concerns about the world economy. US President George W Bush is due to make an address to the American people later in the day.

"I don't know what they can do. The actions of governments and central banks have had no effects, they haven't freed up credit markets and not inspired confidence in stock markets," said David Jones, chief markets strategist at IG Index.

It's not just stocks that are taking a hammering. Oil prices continue to plummet and have fallen to a one-year low below $83 a barrel while currencies, especially the British pound have been sold heavily. The Japanese yen and gold remain in demand as safe-haven assets.

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