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Shares plummet on recession fears Shares plummet on recession fears
(30 minutes later)
European share markets have all fallen sharply on renewed recession fears, following an earlier sell-off in Asia.European share markets have all fallen sharply on renewed recession fears, following an earlier sell-off in Asia.
London's FTSE index plunged 7% after figures confirmed Britain's economy shrank 0.5% in the last quarter - the first time in 16 years.London's FTSE index plunged 7% after figures confirmed Britain's economy shrank 0.5% in the last quarter - the first time in 16 years.
The pound fell to $1.52 at one point - the lowest level in five years - on expectations of further UK rate cuts. The pound fell to $1.52 at one point, the lowest level in six years, on expectations of further UK rate cuts.
There were similar falls in other European markets. Frankfurt fell 9% and Paris was down nearly 8%. There were similar falls in other European markets, Frankfurt was down 9% while Paris fell 8%.
Banking shares were particularly hard hit. Santander, the largest bank in the eurozone, saw its shares plummet 11%.Banking shares were particularly hard hit. Santander, the largest bank in the eurozone, saw its shares plummet 11%.
It will get worse before it gets better - the next 12 months will be very difficult Geoffrey Dicks, RBS Robert Peston's blogIt will get worse before it gets better - the next 12 months will be very difficult Geoffrey Dicks, RBS Robert Peston's blog
Elsewhere, HBOS plunged 18%, Barclays dropped 14%, Societe General 12% and Deutsche Bank was down 11%. Elsewhere, HBOS plunged 18%, Barclays dropped 14%, Societe General lost 14% and Deutsche Bank was down 11%.
CMC Markets trader Matt Buckland said: "Volatility and uncertainty seem to be the watch words at the moment."CMC Markets trader Matt Buckland said: "Volatility and uncertainty seem to be the watch words at the moment."
FTSE 100 INDEX: 24 October 2008*All Times GMTFTSE 100 INDEX: 24 October 2008*All Times GMT
DAX INDEX: 24 October 2008*All Times GMTDAX INDEX: 24 October 2008*All Times GMT
Amid wider signs of the global economic slowdown:
  • The UK economy shrank for the first time in 16 years between July and September, confirming that Britain is on the brink of recession
  • Business activity in Europe slumped to a record low in October, according to the eurozone purchasing managers' index - which fell for the fifth consecutive month, to its lowest level since it was started 10 years ago
  • The pound has dropped more than 8% against the dollar this week, as investors expect further UK interest rate cuts. Lower interest rates tend to weaken a country's currency, as investors take their money elsewhere
  • The euro dropped to $1.25, the lowest level for two years, on expectations of eurozone interest rate cuts and slowing economic growth
  • In Moscow, trading was suspended for one hour after the main share index dropped 7.4% in the first two hours of trading
  • The oil producers' cartel Opec agreed to cut oil output by 1.5 million barrels per day at its emergency meeting in Vienna, to prop up falling prices. Oil prices are at a 17-month low amid fears an economic recession will cut demand
 Amid wider signs of the global economic slowdown:
  • The UK economy shrank for the first time in 16 years between July and September, confirming that Britain is on the brink of recession
  • Business activity in Europe slumped to a record low in October, according to the eurozone purchasing managers' index - which fell for the fifth consecutive month, to its lowest level since it was started 10 years ago
  • The pound has dropped more than 8% against the dollar this week, as investors expect further UK interest rate cuts. Lower interest rates tend to weaken a country's currency, as investors take their money elsewhere
  • The euro dropped to $1.25, the lowest level for two years, on expectations of eurozone interest rate cuts and slowing economic growth
  • In Moscow, share trading was suspended until 28 October after both main stock markets plunged more than 10% in morning trading
  • In Romania, the Bucharest stock exchange was temporarily suspended after some shares plunged almost 15%
  • The oil producers' cartel Opec agreed to cut oil output by 1.5 million barrels per day at its emergency meeting in Vienna, to prop up falling prices. Oil prices are at a 17-month low amid fears an economic recession will cut demand
RBS chief economist Geoffrey Dicks said Britain's recession would last for at least a year, saying: "It will get worse before it gets better - the next 12 months will be very difficult."RBS chief economist Geoffrey Dicks said Britain's recession would last for at least a year, saying: "It will get worse before it gets better - the next 12 months will be very difficult."
Earnings fears
Across Asia, share prices tumbled for a third day in a row as investors feared a global recession would badly hit company earnings.Across Asia, share prices tumbled for a third day in a row as investors feared a global recession would badly hit company earnings.
Japan's Nikkei closed at a five-and-a-half year low, down 9.6% after the electronics giant Sony halved its full-year profit forecasts.Japan's Nikkei closed at a five-and-a-half year low, down 9.6% after the electronics giant Sony halved its full-year profit forecasts.
South Korea's market plunged 10.6% as chip maker Samsung announced a 44% fall in its third-quarter profits.South Korea's market plunged 10.6% as chip maker Samsung announced a 44% fall in its third-quarter profits.
Earlier Thursday was another volatile trading day on Wall Street after a slew of weak corporate earnings stoked fears of a United States recession.
The main Dow Jones index fell as low as 8,251 points before closing the day up 172 points or 2% at 8,691.
The technology-heavy Nasdaq, in contrast, lost 0.73% to close at 1,603.9 points.