UK: LONDON: FTSE 100 INDEX FALLS SHARPLY IN EARLY TRADING
English/Nat
European stocks stumbled in early trading on Tuesday as fears increased that the bull market may be at an end.
Markets in London,
Frankfurt and
Paris had lost up to three per cent of their value by mid-morning trading.
The European fall comes in the wake of
Wall Street's overnight slide, which saw the
Dow Jones plunge 6.37 per cent on Monday.
London shareholders woke up to grisly news on Tuesday - markets were headed to new lows.
More than 26 billion pounds sterling was wiped off the value of
U-K shares within minutes of the
London stock market opening.
The
FTSE-100 index fell heavily in early trading, losing 148.9 points to
5100.5.
The international equity slump was triggered after
Russia's
Duma, the lower house of parliament, rejected
Boris Yeltsin's candidate for
Prime Minister,
Viktor Chernomyrdin.
SOUNDBITE: (
English)
"Russia is all about confidence, although the value of the economy is relatively small, as you say about the size of
Scotland, and a market about the size of
Sainsbury's supermarket, in fact its very important in terms of political and economic confidence. In many ways, it was almost, what, the bear that broke the camel's back, if I may mix metaphors because we've been in a state of denial about the difficulties in the far
East for some time. Russia is really brought this on themselves with their knock on effect with the other merging or submerging markets around the world that we've seen.
SUPER CAPTION:
Justin Urquart
Stewart,
Barclays Stockbrokers Director of
Corporate Development
Brokers watched the same scene unfold first in
Asia, then in
Europe on Tuesday.
Shares in
Zurich were down 2.7 per cent. Shares in
Madrid and
Amsterdam dropped 2.6 per cent. The story was the similar in
Scandinavia.
SOUNDBITE: (English)
"Q - Is this going to be a return to 1929? Are we going to see suits flying out of office windows?
A - I don't think so , you've got the forces of darkness out there who are threatening such things on the basis that you'll actually find people saying this could lead to consumers not spending, to retailers not being able to sell and manufacturers not being able to make things and there's no demand however there are also forces of light as well saying our economies are still growing, Europe the UK, and
America - they're slowing down - Where UK and leading US companies are still very profitable, they're not making as much as previously expected but they could probably trade their way out and continue to help grow the economies. What we need to be seeing from here is further political leadership and no doubt also comments and leadership from the
Feds and probably the
Treasury with regards to in due course probably cutting the interest rates to encourage further liquidity. "
SUPER CAPTION:Justin Urquart Stewart, Barclays Stockbrokers Director of Corporate Development
In Asia, indexes in
Tokyo and
Singapore dropped immediately after the opening bell
.
Hong Kong's blue chip
Hang Seng was down 3.25 per cent at 7,038 points at the opening.
It soon extended its losses to fall below the 7,
000 point level, down 293 points, or 4.02 per cent, at 6,982.
SOUNDBITE: (English)
"The trouble is you can't really tell whether the market has found a plateau or whether its just a ledge and it rolls off and falls down to the next one.
Again this is all down to the confidence. As far as the Russia situation is concerned, most of the bad news is out now and so I don't expect much more to fall out of it. But really the problem is do you look for the corporate results, if you're starting to see poor corporate results that could be the next reason for the market going down."
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