Continuing woes on the world stock markets

Posted by admin on 16 October, 2008 under Business news | Be the First to Comment

The gains ealier this week on the FTSE 100 have since been wipped out over yesterday and the falls continue today to a present level of 3,944 representing a fall so far today of 3.3%.

The Dow Jones fell by 733 points overnight from a rally to 9,311 earlier in the week to close at 8,578 representing a 7.9% fall as the economic gloom deepened. Fears continue over the recent financial rescue plans over concerns that the measures taken will not be enough to avert a deep and prolonged global recession. Even some of the safe havens that a traditionally soughtin tough times, like gold and Japan’s yen currency, made way to losses.

Mining companies have been worst hit being the stocks having the greatest exposure to the present slowdown. Metal and oil producers have lost heavily for a second day as crude prices slid further on commodity exchanges – crude price stands at a low of $72 a barrel.

Switzerland injects cash into UBS

Another bank has been hit hard by the sub-prime losses leading Switzerland to take steps to strengthen its largest bank UBS. Switzerland is the latest country to unveil a banking rescue plan and will raise 6 billion Swiss francs ($5.3 billion) from the Swiss government.

Credit crunch hits US banking profits

Banking profits in the US have been hit hard by the credit crisis although this is not by as much as Wall Street had feared. JP Morgan saw third quarter profits fall to $527 million (£302 million) which represents an 84% drop. America’s Wells Fargo bank also saw its third quarter profits fall to $1.64 billion (£940 million), which represents a 23% drop.

European leaders are seeking bank reform

European leaders are calling for major reforms to the global banking system when they meet to discuss an EU rescue plan. The UK’s Prime Minister, Gordon Brown, said the International Monetary Fund (IMF) should be “rebuilt” in order to help regulate the world’s financial systems where the Germans and French added that the financial markets should be better supervised. It is interesting how the focus from the original proposed summit to target climate change has been changed.

Nationwide has refused to pass on full rate cut

The Nationwide has announced that it will not be following other leading mortgage lenders in passing on the full half-point cut in the Bank of England base rate to it’s borrowers on its standard variable rate. The only customers that will benefit from the full 1/2 per cent cut will be the Nationwide tracker mortgage.