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Investors edgy as US stocks fall | |
(about 4 hours later) | |
US stock markets sank in early trade on fears the bailout of insurance giant AIG would not be enough to dispel the gloom engulfing the financial world. | |
AIG's rescue and a potential takeover of UK lender HBOS had earlier boosted confidence in Asia and Europe. | |
But markets were volatile as nervous investors tried to make sense of the dramatic events in recent days. | |
The widely watched Dow Jones industrial average shed some 200 points, or 1.89%, to 10,850.10 in early afternoon trade. | |
Shares in top UK mortgage lender HBOS, which has faced heavy selling this week, had a rollercoaster ride. | |
HBOS shares fell some 50% before initially recovering after it emerged that it was in advanced talks to be taken over by Lloyds TSB, only to fall again later, slipping 20%. | |
It has been a tumultuous week on financial markets, with significant changes in the financial landscape. | |
The global financial crisis In pictures | |
Key events on Wednesday included:
| |
The FTSE 100 index of leading shares was down 1.85% at 4932.8 reversing earlier gains, with banking shares remaining volatile. | |
I don't think anyone has got any or much confidence in market direction for more than a few days Darren Winder, Cazenove | I don't think anyone has got any or much confidence in market direction for more than a few days Darren Winder, Cazenove |
Shares in Barclays were up 5%, while Lloyds TSB shed 0.1%, reversing earlier gains, while Royal Bank of Scotland was down 10%. | |
Topsy-turvy trade | Topsy-turvy trade |
Trade is likely to remain rocky amid concern that financial system instability will continue after the dramatic events of the past few days. | Trade is likely to remain rocky amid concern that financial system instability will continue after the dramatic events of the past few days. |
"I don't think anyone has got any or much confidence in market direction for more than a few days," said Darren Winder, a strategist at Cazenove. | "I don't think anyone has got any or much confidence in market direction for more than a few days," said Darren Winder, a strategist at Cazenove. |
AIG's bail-out follows the collapse of US investment bank Lehman Brothers, which caused share prices to plummet across the world's financial markets. | AIG's bail-out follows the collapse of US investment bank Lehman Brothers, which caused share prices to plummet across the world's financial markets. |
Another investment bank, Merrill Lynch, has been sold off to Bank of America. | Another investment bank, Merrill Lynch, has been sold off to Bank of America. |
France's Cac 40 share index was down 0.24%, while Germany's Dax index was 0.64% lower, reversing earlier gains as Wall Street opened. | |
Russia's stock exchange suspended trade following steep falls in shares. | Russia's stock exchange suspended trade following steep falls in shares. |
Asian shares had a mixed session. Stocks in Tokyo, Taipei, and Seoul all rose, although prices in Hong Kong, Shanghai and Australia lost ground. | |
Japan's Nikkei 225 index ended up 1.2% at 11,749.79, having risen by as much as 2.3% earlier in the day. The index had hit a three-year low on Tuesday. | Japan's Nikkei 225 index ended up 1.2% at 11,749.79, having risen by as much as 2.3% earlier in the day. The index had hit a three-year low on Tuesday. |
Hong Kong's Hang Seng index ended down 3.6% at 17,637.19 points. | Hong Kong's Hang Seng index ended down 3.6% at 17,637.19 points. |