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Markets tumble

By unknown | Oct 09, 2008 | COMMENTS [ 0 ]

Tamlyn Stewart

Tamlyn Stewart

The credit crisis continued its assault on global stock markets yesterday which went into free-fall relentlessly despite major central banks launching co-ordinated interest rate cuts in a new gamble to stem the collapse.

The All Share Index opened more than four percent lower yesterday and the rand remained volatile as markets crashed.

Markets' dislike of uncertainty was clearly depicted in the rand's activity when former defence minister Mosiuoa Lekota announced at a press conference that a rival party to the ruling ANC may be formed by disgruntled ANC members. It gyrated between R9.28 to the dollar and R9,45 - the lowest level since November 2002. By 7pm the local currency was bid at R9,23 to the dollar.

- The domino effect on world markets yesterday:

l US

The Fed's announcement on Tuesday that it would intervene in the commercial paper market to improve liquidity and unfreeze lending triggered a brief rally on the markets, but that lost momentum and the Dow Jones ended five percent lower, which had a knock- on effect on Asian markets the following morning.

l Asia

In Japan the Nikkei plummeted, closing 9,38percent lower.

In Hong Kong the Hang Seng didn't fare much better, losing 8,17percent. Hong Kong slashed its interest rates by 100 basis points yesterday, following Australia's 100 basis point cut on Tuesday.

l Russia

Trading on Russia's MICEX and RTS was suspended after shares crashed in the first hour of trade. The MICEX, where most trading takes place, was shut until Friday after it dropped more than 14percent in the first half-hour of trading. The RTS index - which has lost more than 69percent since its May peak - has been closed until further notice.

l South Africa

The all share index closed 2,81percent lower after an initial 4,5percent fall on opening on the back of still-tumbling world markets as investors' fears of the growing credit crisis and a possible global recession grew. - With I-Net Bridge, AFP and Sapa-AP


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