* Graeme Wearden
* guardian.co.uk,
* Thursday March 13 2008
This article was first published on guardian.co.uk on Thursday March 13 2008. It was last updated at 10:24 on March 13 2008.
Shares in London and the rest of Europe fell sharply this morning after the dollar tumbled to new lows against other major currencies and oil hit another record high.
In a sign that the optimism following Tuesday's emergency action by the world's central banks has now evaporated, the FTSE 100 index lost 2% in the opening minutes of trading.
By 9.45am the index of Britain's largest companies was 113 points lower at 5,663.4, more than wiping out yesterday's gain of 86 points. Every share was down, with blue chip firms such as British Airways and Barclays among the big fallers. Markets in Germany and France also fell by over 2%.
The plunge followed the worst day's trading in two-and-a-half years in Japan, where the Nikkei closed down 3.3%.
The cause of the gloom was new weakness in the dollar. It fell against the yen overnight, and this morning hit a 12-year low of ¥99.77. This is the first time that one dollar has been worth less than ¥100 since November 1995. The strength of the yen will make Japanese exports more expensive in the US, and analysts warned that some Japanese manufacturers may have to trim their profit forecasts.
The dollar also hit a three-month low against sterling of $2.0341, and a new all-time low of $1.5571 against the euro, as traders piled into commodities. Oil hit a new high of $110.20 per barrel in New York despite a US government report showing higher-than-expected reserves.
On Tuesday, the Bank of England and the US Federal Reserve acted to increase liquidity in the markets, with the Fed offering another $200bn. This cheered investors in both Wall Street and London, but some commentators warned that the feel-good factor would not last long.
Speaking this morning, chancellor Alistair Darling warned that the UK, like the rest of the world, was facing "an almost unprecedented period of turbulence". Yesterday he cut the government's economic growth forecasts for 2008 and 2009.
* guardian.co.uk © Guardian News and Media Limited 2008
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Fresh US fears send dollar and markets plunging
Stock markets across Europe and Asia plummeted this morning as the dollar slumped to new lows and fears grew that the US Federal Reserve's surprise $280 billion liquidity bailout will fail to stop a full-blown recession.
The FTSE 100 index of London's leading companies fell 133.8 points to 5,642.6 in the first hour of trading this morning, as the dollar fell to 2.033 against sterling.
In Europe, the greenback continued to lose strength against the euro at $1.5578, sending Germany's Dax index down 1.06 per cent to 6,529.62 while in France, the Paris CAC 40 index declined 1.83 per cent to 4,610.99 points.
Earlier this week, the US Federal Reserve led a group of central banks, including the Bank of England, in offering $280 billion worth of securities to lenders in an effort to create liquidity in the global banking markets.
However, doubts are escalating that the surprise move will be enough to stop a slowdown, putting further pressure on the US Fed to make a steep cut to interest rates next week.
Later today, Henry Paulson, the US Treasury Secretary, will unveil a list of measures aimed at stopping a repeat of the current credit crisis which are expected to include tighter regulation of mortgage providers and better disclosure for credit rating agencies.
In Asia, worries over the success of the US liquidity plan as well as the plunging dollar resulted in markets nursing large falls.
The US dollar hit a 12-year low of 100.40 against the yen, sending Japan's Nikkei down 427.69 points, or 3.3 per cent, lower at 12,433.44.
Foreign exchange brokers said it was now “inevitable” that the yen would break through the key 100.00 level against the dollar. Speculation began in certain quarters that the Japanese authorities may step into the forex market to intervene if the yen continues its surge towards the 95.00 level.
Market veterans, however, said that Japan was unlikely to risk such a gambit in the current climate – the Ministry of Finance came under heavy international fire in early 2004 when it refused to halt its $50 billion programme of market intervention.
Traders in Tokyo described a stock market with “no visible means of support”, and investors said there is a growing sense that Tuesday’s liquidity-boosting package from the US Federal Reserve was not enough to avert a credit crisis.
Hong Kong’s Hang Seng index took a 3.8 per cent tumble, losing 1,121.12 points to close at 22,301.64 on fears that rocketing inflation in China will prompt the authorities there to impose tightening measures.
il piano della fed non convince, borse asiatiche chiudono tutte in forte calo
Euro sempre da record
La moneta unica supera quota 1,56 nei confronti del dollaro. Le piazze europee partono in decisa flessione
MILANO - Non si ferma la corsa dell'euro. La moneta unica ha raggiunto quota 1,5627 dollari nei primi scambi della mattinata sui mercati valutari europei. La divisa americana però è debole anche contro le altre monete: rispetto allo yen il dollaro cala fino a 99,77 ai minimi da dodici anni. Record storico anche per il franco svizzero a 1,008 dollari.
BORSE - La debolezza del dollaro è dovuta anche alla convinzione dei mercati che la crisi finanziaria negli Usa accesa dalla vicenda dei mutui subprime, porterà inevitabilmente ad una recessione dell'economia americana destinata ad estendersi a livello mondiale.
E così le Borse asiatiche sono tutte in deciso calo sui timori che il maxi-piano da 200 miliardi annunciato lunedì dalla Fed e dalle principali banche centrali possa rivelarsi non efficace. I mercati del «Far East» si apprestano a chiudere la giornata registrando la maggiore flessione della settimana. L'indice dell'area Asia - Pacifico Msci ha segnato una flessione del 2,1%, mentre a fare peggio è stata Tokyo che ha terminato le contrattazioni in calo del 3,33%.
In chiusura infatti l'indice Nikkei è piombato a quota 12.433,44, dopo aver bruciato addirittura 427,69 punti: si tratta del peggiore risultato dal 31 agosto 2005, e in precedenza le perdite erano arrivate a sfiorare i 500 punti, vale a dire il 4%. Hong Kong scivola del 3,9%. Giù del 2,57% Shanghai. Taiwan perde il 2,66% e Seul cede del 2,6%. Tra i titoli maggiormente penalizzati quelli delle compagnie aeree che soffrono il prezzo del petrolio, con il barile che ormai viaggia sui 110 dollari. Qantas Airways ha lasciato sul terreno il 4,2% alla Borsa di Sidney e la Korean Air Lines l'8,3%. Male anche Cathay Pacific (-5,1%).
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