• ACI Russia

08/28/1998 08:48:01 FOCUS-Russian bear tramples world stock markets

Пост обновлен 3 сент. 2018 г.

By Malcolm Davidson

LONDON, Aug 28 (Reuters) - The Russian bear trampled through

financial markets again on Friday with European stock markets

following Asia and Wall Street into a downward spiral.

German shares, which are heavily exposed to events in

Russia, tumbled five percent in early trade and that story was

taken up as each bourse opened in Europe.

Britain's blue chip FTSE 100 index opened down more than one

percent and quickly slid more than four percent. France's CAC-40

also lost over four percent.

"It's a cycle of one weak market triggering another weak

market triggering another weak market," said Michael Wilkins, a

dealer at Credit Lyonnais in Tokyo. "Where's the end?"



MARK 1.7868/79 YEN 143.00/10 STERLING 1.6580/85

GOLD $272.25/273.00 -10.00 (pvs PM fix) BRENT $0.00 -0.00

FTSE 5157.5 -211.00 CAC 3,622.31 -123.33 X-DAX 4778.84



Wall Street started the latest phase of the rout, plunging

357 points, or 4.19 percent overnight. Tokyo traders responded

by pushing Japanese stocks to their lowest levels in 12 years,

the Nikkei 225 index sliding 3.46 percent.

The Madrid and Athens bourses fared particularly badly in

Western Europe, the Athens General Index plunging more than

seven percent and Madrid's IBEX index losing eight percent as

investors fled in the face of the international turmoil.

The state of share markets underlined a flight to quality

move into bonds, with German Bunds and British gilts pushing to

contract highs in the wake of gains by U.S. treasuries.

The stocks slump hit the dollar, which softened in Europe as

the foreign exchange market began to price in the possible

impact of the emerging markets crisis on the U.S. economy.

But the safe-haven Swiss franc continued to gain. The

dollar, which dropped to a 12-week low of 1.471 against the

Swiss franc in overnight trade, was quoted at 1.4748 at 0815


Gold opened in Europe at a new 18-1/2 year low of $275.40 an

ounce as Australian gold producers continued to unload bullion

and the market was gripped by fears that Russia might be forced

to sell some of its gold reserves.

The latest round of stock market pummelling came as Russian

President Boris Yeltsin returned to the Kremlin for the first

time in several days and the central bank said it would issue

one billion roubles in discount bonds next week in an effort to

manage liquidity in the badly damaged banking system.

Although some analysts have started talking about the

trading opportunities that are opening following the plunging

asset values around the world, the short-term view on all

markets was grim.

"I think you will see major selling today," one German

trader said, pointing to Thursday's heavy trading on the New

York Stock Exchange, which posted its second-biggest volume day

ever. "That to me is a negative sign."

Dealers said the market continued to focus on events in

Russia, but there was also growing concern that Latin American

economies would be enveloped in the turmoil.

Car shares led decliners. Daimler <DAIG.F> lost nearly six

percent in early trade, VW <VOWG.F> fell 4.5 percent and BMW

<BMWG.F> dropped more than three percent.

Banks, which have been at the centre of the Russian storm

because of their exposure there, suffered further losses with

Vereinsbank <BVMG.F> plunging more than eight percent.

Deutsche Bank <DBKG.F> fell more than five percent and

Commerzbank <CBKG.F> and Dresdner were down more than three


French traders said as long as deep uncertainty lasted on

the Russian political and financial front, fund managers would

remain wary of exploiting the cheapness of stocks.

"No-one's interested in stock stories. There's a ghost around

every corner," an equity saleswoman at a big French brokerage

said. "We're in the absolute eye of the storm," she added.

Foto: REUTER. Investors check a small screen at the opening of trading at the Australian Stock Exchange in Melbourne August 28 in this zoomed time exposure. Overnight trading saw the Australian dollar realise another all-time low in the wake of currency dealing and market turmoil in Russia. But weakened share markets closed today well off the day's lows.

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