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| Version 5 | Version 6 |
|---|---|
| US concerns prompt market falls | US concerns prompt market falls |
| (19 minutes later) | |
| Global shares have fallen sharply with London's FTSE 100 index seeing about £40bn wiped off its value as it faced its lowest close since October 2005. | Global shares have fallen sharply with London's FTSE 100 index seeing about £40bn wiped off its value as it faced its lowest close since October 2005. |
| After a heavy Asian sell-off, markets in Europe spiralled downwards - London slipping 3% and Frankfurt down more than 2% while Wall Street opened lower. Analysts blamed mounting concerns about the health of US financial institutions and possible global fall-out. | |
| Oil moving back close to $146 a barrel has also added to investor worries. | Oil moving back close to $146 a barrel has also added to investor worries. |
| Meanwhile surging inflation - which hit 3.8% last month in the UK - has also unnerved traders. | Meanwhile surging inflation - which hit 3.8% last month in the UK - has also unnerved traders. |
| 'Sapping confidence' | 'Sapping confidence' |
| Markets had steadied as traders absorbed details of the US government-backed rescue of Freddie Mac and Fannie Mae - in the aftermath of the collapse of another lender IndyMac. | Markets had steadied as traders absorbed details of the US government-backed rescue of Freddie Mac and Fannie Mae - in the aftermath of the collapse of another lender IndyMac. |
| But while this was initially well received, analysts say optimism appears to have faded. | But while this was initially well received, analysts say optimism appears to have faded. |
| "The problems Fannie Mae and Freddie Mac face still highlight issues which are fundamental to the market," said Henk Potts, equity strategist at Barclays Stockbrokers. | "The problems Fannie Mae and Freddie Mac face still highlight issues which are fundamental to the market," said Henk Potts, equity strategist at Barclays Stockbrokers. |
| "The reality is everyday investors are looking at runaway inflation, falling house prices, weak business and consumer confidence surveys and that continue to sap away investors' confidence." | "The reality is everyday investors are looking at runaway inflation, falling house prices, weak business and consumer confidence surveys and that continue to sap away investors' confidence." |
| On Wall Street, key markets lost ground in early trading - the Dow Jones index shedding 160 points, 1.5% to 10,891.1 and the Nasdaq falling 1.3% to 2,184.5 points. | |
| Economic difficulties | Economic difficulties |
| Analysts said that testimony to the Senate Banking Committee from Federal Reserve chairman Ben Bernanke and Treasury Secretary Henry Paulson was being watched closely. | Analysts said that testimony to the Senate Banking Committee from Federal Reserve chairman Ben Bernanke and Treasury Secretary Henry Paulson was being watched closely. |
| Mr Bernanke said the economy was being confronted by "numerous difficulties" including persistent strains in financial markets, rising joblessness and housing problems. | Mr Bernanke said the economy was being confronted by "numerous difficulties" including persistent strains in financial markets, rising joblessness and housing problems. |
| In the UK, the FTSE 100 dropped 3% to its lowest level since 2005 - with banks including Royal Bank of Scotland and Lloyds TSB among the biggest fallers. | |
| The financial sector in Germany was also hit where the Dax index lost 2.7%. | |
| Germany's leading index is heading for its lowest close since October 2006, as a survey suggesting that investor confidence was at a record low was released. | Germany's leading index is heading for its lowest close since October 2006, as a survey suggesting that investor confidence was at a record low was released. |
| Meanwhile France's Cac 40 index, down 2.3% on the day, faced its worst finish in more than three years. | |
| A sell-off in Asia hit Hong Kong's Hang Seng index, down 3.8%, while Japan's Nikkei 225 index slid 2% and Chinese shares fell 3%. | A sell-off in Asia hit Hong Kong's Hang Seng index, down 3.8%, while Japan's Nikkei 225 index slid 2% and Chinese shares fell 3%. |
| Of the Asian losses, banks were the hardest hit as investors worried that US financial market woes would spill over to Asia. | Of the Asian losses, banks were the hardest hit as investors worried that US financial market woes would spill over to Asia. |
| In Japan, Mitsubishi UFJ Financial and Mizuho Financial Group both lost 5% over worries about their exposure to debt issued by Fannie Mae and Freddie Mac - who own or guarantee almost half of all US home loans. | In Japan, Mitsubishi UFJ Financial and Mizuho Financial Group both lost 5% over worries about their exposure to debt issued by Fannie Mae and Freddie Mac - who own or guarantee almost half of all US home loans. |
| These losses took Japan's Nikkei 225 - which has lost 11% of its value in the past month - to its first sub-13,000 points close since 15 April. | These losses took Japan's Nikkei 225 - which has lost 11% of its value in the past month - to its first sub-13,000 points close since 15 April. |
| In Hong Kong, China's top lender ICBC fell 4.3% and China Construction Bank lost 4.5%. | In Hong Kong, China's top lender ICBC fell 4.3% and China Construction Bank lost 4.5%. |