Emerging Markets Dive; Russia Plunges 19%

123jump.com Staff
06 Oct, 2008
New York City

The emerging markets plunge around the world as the deepening banking crisis spreads to Europe. Markets in Russia plunge 19% and in Indonesia and Brazil dive 10%, Saudi Arabia sank 9.8%, Turkey and Canda drop 7%. Most markets in Europe are down 5% and three popular indexes in the U.S. are 4% lower.

[R]10:25AM New York – The stock markets around the world plunge as banking crisis spreads to Europe.[/R]

The financial markets around the world suffered one of its worst single day declines. The bench mark indexes in emerging markets plunged as Asian markets fall more than 4%, European markets decline 5% or more and American markers drop between 4% and 10%.

Russia led the decliners in the global markets with a plunge of 19% followed by more than 10% dive in Indonesia, Brazil and near 10% declines in Saudi Arabia, Turkey and Canada.

The European nations leaders struggled to find a regional solution to the rapidly growing European banking crisis. On Saturday, heads of France, Germany, Italy and UK met in Paris to form a regional solution but failed to agree on a cross border bailout plan.

After the meeting, Germany raised its protection to bank deposits and was forced to offer 50 billion in bailout to the second largest lender Hypo Real Estate Holding. The Netherlands seized Fortis operations in the country and Belgium and Luxembourg agreed to sell Fortis operation to France based BNP Paribas SA. Unicredit in Italy was forced to raise capital and offer its current year dividend in stock.

In the late evening European markets dropped 4% and 5% after the markets in Asia fell more than 4%. The MICEX index, that measures value of 30 largest Russian companies plunged 18.6%. The benchmark indexes in Turkey plunged ISE National 100 index tumbled 7.1%, the JCI Index in Indonesia dived 10%, and Tadwul Share Index sank 9.8%. The Bovespa index in Brazil opened 8% lower and quickly dropped to 10.4% and Bolsa index in Mexico declined 4.3%.

Emerging markets are likely to remain depressed as foreign investors repatriate capital home and look for safer alternative.

Crude oil prices futures declined 3.3% or $2.88 a barrel to $91. Gold surged $37.30 or 4.5% to $870.50 an ounce. Immediate month delivery futures prices of Cocoa, sugar, soybean and wheat dropped between 4% and 5%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 465.05 or 4.25% to 10,473.09 , Hang Seng index in Hong Kong decreased 878.64 or 4.97% closed to 16,803.76. CSI 300 index in China lower 114.96 or 5.12% closed to 2,128.70. ASX 200 index in Australia decreased 155.00 or 3.30% to close 4,540.40. The KL Composite index in Malaysia lower 19.86 or 1.95% closed to 996.84.

The Kospi Index in South Korea decreased 60.90 or 4.29% to close at 1,358.75, SET index in Thailand closed lower 38.25 or 6.48% to 551.80, and JSE Index in Indonesia decreased 183.77 or 10.03% to 1,648.74. The Sensex index in India decreased 724.62 or 5.78% closed to 11,801.70.

Europe Markets Review

In London FTSE 100 Index traded lower 261.80 or 5.26% to 4,718.50, in Paris CAC 40 Index decreased 242.62 or 5.95% to 3,838.54 and in Frankfurt DAX index traded lower 321.10 or 5.54% to 5,475.93. In Zurich trading SMI decreased 323.45 or 4.70% to 6,556.37.