Fear, panic and frantic selling
Updated on 06 October 2008
On a day when the very potency of concerted government action is called into question, share prices collapse on stock markets across the world. Faisal Islam reports.
In London, banking shares took the biggest hit, with the Royal Bank of Scotland down 20 per cent, sending the FTSE hurtling towards its biggest one-day drop since the crash of 1987.
In New York the Dow Jones has fallen below 10,000 for the first time in four years.
The chancellor, Alistair Darling, promised to do "whatever neccessary" to ensure the stability of the financial system - a pledge echoed across Europe and the United States.
But it all raises serious questions about the very fundamentals of the world's banking system.
Across the globe, without exception, markets have plummeted.
- In Japan the Nikkei was down four and a quarter per cent, its lowest close for more than four and a half years.
- The Hong Kong stock exchange closed down 5 per cent.
- India's main index in Mumbai was down 5.78 per cent.
- In Moscow, trading was twice suspended on the RTS index after huge falls. It closed down 19 per cent, its biggest daily fall in 13 years.
- The DAX in Frankfurt was down over 7 per cent.
- Iceland suspended share trading in financial firms as it struggled to cope with the economic crisis. Its currency lost nearly a third of its value today.
- In London the FTSE index of 100 leading shares closed almost eight per cent lower, with more than £93bn wiped off their value.
- In New York a short time ago the Dow Jones was down over five per cent.
In the United States as the Dow plummeted to new depths, despite the multi-billion dollar bailout.
One of the key figures in the whole financial crisis has been speaking for the first time.
The disgraced head of Lehman Brothers, the investment bank which became the biggest casualty of the credit crunch when it collapsed last month, has told a congressional hearing of his "despair" over what happened.
From Washington, Jonathan Rugman reports.
