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World Markets Plunge on Recession Fears

By Jennifer Yousfi
Managing Editor
Money Morning

Equity markets around the world nosedived today (Friday) as fears of a global recession intensified.

At noon ET today, the blue-chip Dow Jones Industrial Average Index had plunged 267.46 points (-3.08%), to trade at 8,423.79. The tech-laden Nasdaq Composite Index shed 34.67 points (-2.16%), to reach 1,569.24. And the broader Standard & Poor’s 500 Index dropped 28.63 points (-3.15%), to hit 879.48.

The S&P 500 is 45% down from its peak.

“It’s a bear market on steroids,” David King, a money manager at Putnam Investments, who helps manage about $137 billion, told Bloomberg Television. “It’s very accelerated by the pace of financial markets today.”

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In overseas markets, Japan’s Nikkei Index had an 811.90-point decline to close at 7,649.08, its lowest level in over five years. Hong Kong’s blue-chip Hang Seng Index plummeted 1,142.11 points to close at 12,618.40, its lowest level since August 2004.

"The market is pretty desperate and at a loss. Four days running of big losses, though the turnover is quite low," Howard Gorges, vice chairman South China Securities, told Reuters, speaking of the Hong Kong markets. The Hang Seng Index has dropped 55% so far this year.

"People are just standing aside. These are dangerous markets to play around with. That’s the main reason for getting into cash," Gorges said.

In Europe, major indices sunk on news that the United Kingdom’s gross domestic product contracted more than expected with a decline of 0.5% in the third quarter.

The FTSEurofirst 300 Index of blue-chip European shares skidded 4.9% to close at 829.73 points, its lowest closing level since May 2003, Reuters reported.

The Paris-based CAC40, London’s FTSE 100, Madrid’s IBEX 35 and the Frankfurt-based DAX all posted triple-digit losses.

At midday, the dollar had gained ground against the euro [up 1.60%] and the pound sterling [up 2.47%], but lost ground against the yen [down 4.37%].

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This entry was posted on Friday, October 24th, 2008 at 7:50 pm and is filed under Top News. You can follow any responses to this entry through the RSS 2.0 feed. Due to the amount of comments we receive Money Morning will not be able to respond to all questions. If you have not already registered to leave a comment, once doing so you will receive Money Morning's Daily Email.

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  1. Pingback by » World Markets Plunge on Recession Fears on 24 October 2008:

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  2. Comment by Jason on 24 October 2008:

    History tells us that if the US enters recession the rest of the world will follow, but the US will be the first to emerge from a recession.

    It isn’t the end of the world as we know it. YET!

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