Financial crisis: Stock markets across world fall amid emergency bank rescues

Stock markets across the world fell as emergency bank rescues and interest rate cuts failed to sufficiently reassure panicky investors.

After a disastrous day’s trading in Asia, where the Tokyo stock exchange closed 9.38 per cent down, European markets suffered losses of up to eight per cent, including a 5.18 per cent fall on the FTSE, followed quickly by falls on the New York Stock Exchange.

Even the oil-rich Gulf states, which at one time seemed immune to the financial crisis affecting the West, suffered a collapse in confidence, while Russia suspended trading for two days to prevent a 14 per cent slide turning into a rout

The world’s central banks went on the offensive on Wednesday with interest rate cuts in America, Britain, China, Canada, Sweden, Switzerland and by the European Central Bank.

The Bank of England’s decision to cut interest rates by half a per cent did at least bring some good news for home owners. Four million people with tracker mortgages will see an average £50 cut in their monthly payments.

Coupled with the banking bail-outs in America, Britain and parts of Europe, world leaders had hoped the emergency measures would finally stop the rot.

But the turmoil on the world’s markets continued. In London, the FTSE 100 shed 5.18 per cent to finish at 4,366 while in Paris the CAC 40 fell 6.39 per cent and Frankfurt was down 5.88 per cent. There were declines of 5.51 per cent on the Swiss Market Index, 5.20 per cent in Madrid, 5.71 per cent in Milan, 7.36 per cent in Brussels and 7.68 per cent in Amsterdam.