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Fear grips global stock markets Fear grips global stock markets
(30 minutes later)
US shares have fallen in volatile trading on fears of a global slowdown. European stock markets finished sharply lower in one of the worst days of trading in 30 years despite government actions to fight the crisis.
Reassurances from US President George W Bush failed to calm panicked investors and the UK's FTSE 100 fell almost 9%.
The French Cac lost 7.7% and German Dax lost 8.4% in a day of heavy selling.
Wall Street shares have also fallen in volatile trading on fears that the financial crisis will tip the global economy into a recession.
The Dow Jones Industrial Average sank below 8,000 but then recovered slightly to trade down 3.7% at 8,264 points.The Dow Jones Industrial Average sank below 8,000 but then recovered slightly to trade down 3.7% at 8,264 points.
US President George W Bush has sought to reassure traders. He said the White House was acting to resolve the crisis and restore stability to the markets. In other major developments:
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  • The British pound tumbled to a five-year low against the US dollar to trade at $1.6902 at one point, but recovered later. It also fell against the euro to 1.245 euros
  • The Prime Minister, Gordon Brown, again called on other countries to follow Britain's bank rescue package.
  • Tokyo's shares plunged 24% during the week, double their weekly fall during the 1987 market crash
  • Oil prices plummeted to a one-year low in European trading, with the price of Brent crude oil dropping to $77.2 a barrel at one stage.
  • The three-month rate at which banks lend dollars to each other - known as Libor - has risen to 4.8%
  • Moscow and Jakarta stock markets remain suspended because of excessive volatility
  • The Vienna stock market fell 10% on re-opening after trading was suspended on Friday morning.
His comments did not halt heavy selling across Europe. The UK's FTSE 100 closed 8.9% lower, while the French Cac lost 7.7% and German Dax lost 8.4%. Crisis meetings
Investors increasingly fear a global recession, despite interest rate cuts and cash injections by central banks.
Ahead of a key meeting of finance ministers from G7 countries, US President George W Bush said the White House was acting to resolve the crisis and restore stability to the markets.
"We are a prosperous nation with immense resources and a wide range of tools at our disposal," President Bush said."We are a prosperous nation with immense resources and a wide range of tools at our disposal," President Bush said.
Finance ministers from the G7 are to meet in Washington later. Separately, the International Monetary Fund (IMF) will hold its annual meeting in Washington.
Giant falls
The underlying illness remains in the system - as manifested in the record amounts banks were charging each other yesterday for lending to each other Robert PestonBBC Business Editor Robert Peston's blogInterbank lending frozen
Wall Street has lost more than 20% of its value in the past ten trading days and is heading for one of its biggest weekly falls since the Dow was created 112 years ago.Wall Street has lost more than 20% of its value in the past ten trading days and is heading for one of its biggest weekly falls since the Dow was created 112 years ago.
Meanwhile, the UK's FTSE closed down 381.7 points lower at 3,932. Meanwhile, the UK's FTSE closed down 381.7 points lower at 3,932, wiping £91.2bn off the value of the largest UK shares.
The index has fallen 21% this week - the second-biggest fall in the FTSE 100.
The largest single day fall in the FTSE 100 was on 23 October 1987 - coined Black Monday - when the index lost 28.23%.
In Paris, the Cac 40 index finished at 3,176.5, while the Frankfurt-based Dax closed at 4,533.7.In Paris, the Cac 40 index finished at 3,176.5, while the Frankfurt-based Dax closed at 4,533.7.
Investors increasingly fear a global recession, despite interest rate cuts and cash injections by central banks.
Finance ministers from the G7 are to meet in Washington later.
As well as the G7 meeting, talks will be held at the International Monetary Fund (IMF) in Washington.
DOW JONES INDUSTRIAL AVERAGE: 10 October 2008*All Times GMTDOW JONES INDUSTRIAL AVERAGE: 10 October 2008*All Times GMT
FTSE 100 INDEX: 10 October 2008*All Times GMTFTSE 100 INDEX: 10 October 2008*All Times GMT
Bank bail-out
The Prime Minister, Gordon Brown, again called on other countries to follow Britain's bank rescue package.
"What we need now is for other countries to be doing similar things," he told the BBC news channel.
He said he was confident the bail-out would eventually help stabilise the economy.
"Everybody depends on banks. We're trying to get the banks to do what they've traditionally done, to get the flow of money to businesses, to help people with their mortgages, to make sure people's savings are safe," he said.
In other major developments:
  • The British pound tumbled to a five-year low against the US dollar to trade at $1.6902 at one point, but recovered slightly later. It also fell against the euro to 1.245 euros
  • Tokyo's shares plunged 24% during the week, double their weekly fall during the 1987 market crash
  • Oil prices plummeted to a one-year low in European trading, with the price of Brent crude oil dropping to $77.2 a barrel at one stage.
  • The three-month rate at which banks lend dollars to each other - known as Libor - has risen to 4.8%
  • Moscow and Jakarta stock markets remain suspended because of excessive volatility
  • The Vienna stock market fell 10% on re-opening after trading was suspended on Friday morning.
Despite concerted government action, investors are increasingly fearful the financial crisis will prompt a global recession. The underlying illness remains in the system - as manifested in the record amounts banks were charging each other yesterday for lending to each other Robert PestonBBC Business Editor Robert Peston's blogInterbank lending frozen
The BBC's business editor Robert Peston said markets were worried about Friday's auction of insurance claims on the debts of the collapsed US investment bank, Lehman Brothers.
This could not come at a worse time for bank shares, said our correspondent.
Earlier there were heavy falls across Asia's markets as a climate of fear took hold on Friday.Earlier there were heavy falls across Asia's markets as a climate of fear took hold on Friday.
In Japan, the Nikkei index slumped in its biggest one-day drop since the 1987 stock market crash.In Japan, the Nikkei index slumped in its biggest one-day drop since the 1987 stock market crash.
The crisis also claimed its first Japanese financial institution, with the insurance company Yamato Life going bankrupt.The crisis also claimed its first Japanese financial institution, with the insurance company Yamato Life going bankrupt.
What kind of effect is the fall in share prices having on your life? Are you worried about your pension or investments? What questions would you like to put to the experts? Send us your questions using the form below.What kind of effect is the fall in share prices having on your life? Are you worried about your pension or investments? What questions would you like to put to the experts? Send us your questions using the form below.
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