11 May 2004 11:10
Oil, Iraq and rate fears knock GBP24bnoff Footsie
SOARING oil prices, rising interest rate fears and escalating tensions in Iraq and Chechnya combined to throw global
stock markets into turmoil yesterday.
About GBP24 billion was wiped from the value of leading UK shares as the FTSE 100 Index suffered its biggest one-day
points fall since May 19 last year.
It fell 103.2 points to 4395.2.
The negative tone was set by heavy overnight losses in Far East markets, where the Japanese Nikkei and Hong
Kong's Hang Seng lost 5 per cent and 3 per cent of their respective values.
Wall Street's Dow Jones had plunged through the psychologically important 10,000-point mark by the time London
closed, and French and German markets both fell nearly 3 per cent.
London market dealers said there had been no positive catalyst for fund managers to buy shares.
"It's not exactly carnage but it feels extremely uncomfortable and there is a feeling the hedge funds have
closed out their bear positions and are ready to go again, " said David Buik, of spread-betting firm Cantor
Index.
One senior dealer said:
"Most people were aware of the rising-interest-rate scenario but when you have the debacle of the treatment of
prisoners in Iraq and events in Chechnya on top it is not a good day to buy.
"There has not been massive selling but the buyers have gone to ground and are not prepared to deal."
[The Express] |
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