European, US shares ride global see-saw
Financial turmoil: Rouble trouble batters traders - and the panic may not be over
Saturday 29 August 1998
In London the FTSE 100 Index collapsed by nearly 260 points in early trading before recovering, then falling again to close down 119.1 at 5249.4.
The Dow Jones opened confidently, rising 70 points during the morning before falling 154 points at lunchtime, recovering slightly in the afternoon when the index was off 40 points at 8128 points, and closing at 8051.68, after a total fall for the day of 114.31. Earlier, shares in Tokyo had fallen to a 12-year low when the Nikkei index closed down 497.6 points at 13,915.2.
In Russia, shares fell to new historic lows, although the volume of trade was negligible, according to dealers.
In Frankfurt, shares were pounded by concern over the exposure of German companies to Russia's failing economy. The Xetra DAX electronic index fell 5.2 per cent but rallied to end the day down 86.9 points at 4925. France, with a lighter exposure to Russia, saw its CAC-40 index fall by 36.7 points to close at 3708, a dip of 1 per cent.
Deutsche Bank and Bank of America, two of the world's biggest banks, yesterday became the latest to reveal exposures amounting to several hundred million pounds as a direct result of the crisis.
Deutsche Bank confirmed it had lent a total of 1.35bn marks (pounds 460m) to Russian institutions without the support of state guarantees. It had also taken a big position in short-term Russian government paper totalling $290m (pounds 175m).
It said it would not know the scale of its loss until the Russian government published details of its debt restructuring plan. Trading in the short- term paper has been halted by the Russian government.
Deutsche Bank - Germany's largest private bank - said it had made other investments to offset the position in government paper. "The bank will follow further developments in Russia closely and will adjust its already considerable amount of corresponding risk provisions as required according to the latest developments," said a statement.
BankAmerica yesterday said it too had fallen victim to the crisis. It revealed trading losses of $220m in the last three months alone, most of them in Russia.
Seeking safer investments, traders rushed into government bonds. That sent the yield on 30-year US government bonds to its lowest level since sales began in 1977.
Iain Lindsay, head of capital markets strategy at BMO Nesbitt Burns, said: "We're in a state of panic and paralysis - there's outright confusion here. The wave of panic hasn't passed yet."
- 1 Caitlyn Jenner's mother Ester thought her daughter, formerly known as Bruce Jenner, had transitioned for money
- 2 Charles Kennedy 1959-2015: A gifted, compassionate politician whose career was cut short by the 'demon drink' - latest news
- 3 Alton Towers crash: Four seriously injured and 16 guests trapped as Smiler ride carriages collide
- 4 Ann Summers survey reveals the UK's favourite sex position
- 5 Gay teenager 'forced to have sex with his own mother' to 'cure' his homosexuality, campaigners in India say
Man on naked bike ride gets ejected after becoming aroused
Caitlyn Jenner's mother Ester thought her daughter, formerly known as Bruce Jenner, had transitioned for money
Charles Kennedy 1959-2015: A gifted, compassionate politician whose career was cut short by the 'demon drink' - latest news
Alton Towers crash: Four seriously injured and 16 guests trapped as Smiler ride carriages collide
Charles Kennedy dead: A guy once asked the Lib Dem leader who his favourite Muppet was and his letter response was wonderful
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Church of England 'one generation away from extinction' after dramatic loss of followers
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...
£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...
£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...
£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...