European shares plummeted suffering their biggest one-day fall since the September 11th terrorist attacks. Most of the major bourses lost around seven per cent of their value. The sell off hammered banks along with oil companies and mining firms as investors were gripped by fears of a recession in the US. Phrases like stock market crisis and climax sell-off are being used.
In Paris, market analyst Francois Chaulet said: “Markets are driven by the search for gains. When investors think they can buy companies at good prices, that lifts the market. But when there are worries on economic growth or the reliability of the system or on the quality of companies, the only thing driving the markets is fear which sometimes gives way to panic. And that’s what we’re seeing a wind of panic blowing over the stock market”
The red ink splashed over Asia first on Monday. Japan’s Nikkei average lost three point seven per cent closing at a two-year low and Hong Kong down five and half per cent. The euro’s been at a one month low against the dollar and a five month low against the yen.
US markets were closed for a public holiday but the futures indexes are sharply lower suggesting Wall Street will join a global equity markets plunge when they resume trading.