Global stocks went into freefall on Oct. 10, with double-digit losses in Frankfurt, London and Tokyo, on fears that the financial crisis was spiralling out of control, dealers said. In the Far East, Tokyo suffered the biggest daily drop for two decades after shedding 11% at one stage, while in Europe, Frankfurt and London tipped more than 10% lower.
World finance chiefs were preparing an emergency meeting in Washington as a wave of panic selling swept across markets. Interest rate cuts and billions of dollars' worth of cash injections by central banks failed to calm the mayhem. "It's very close to panic. We are drowning in a sea of red numbers," said Barclays Wealth analyst Henk Potts. "The reality is that most investors have been spooked by the sheer pressure that the credit crunch is putting on the global economy."
Tokyo nosedived, as the credit crisis claimed its first Japanese financial institution with the bankruptcy of Yamato Life Insurance, driving the Nikkei stock index down 9.6% by the close. Hong Kong lost 7.2%as panic swirled about the state of the global banking industry.
In Europe, investors were also reacting to this week's nationalization of Icelandic banks Glitnir, Kaupthing and Landsbanki, victims of the crisis. Shortly after the open, London and Frankfurt wiped out more than 10% of their value and Paris more than 9%. All three later trimmed losses but only slightly.
Investors dumped shares across the globe in scenes reminiscent of the 1987 stock market crash. "The last time I can remember this in the market was 1987," said Justin Urquhart-Stewart, marketing director at Seven Investment Management.
London's FTSE 100 index of leading shares nosedived 10.20% to as low as 3,873.99 points -- the first time below 4,000 points since July 3, 2002 -- before pulling back to show a loss of 7.81% at 1045 GMT. "Today looks to be starting off as a complete bloodbath. The FTSE was obliterated on the open," said Capital Spreads managing director Simon Denham in London.
Frankfurt's DAX 30 shed more than 10% and in Paris the CAC 40 dived 9.68% at one stage. They later nursed losses of 9.06% and 7.99% respectively.
The rout quickly spread to other markets. Sydney plunged 8.3%, Singapore lost 7.34% and Seoul slid 4.1%. Shanghai finished 3.57% lower.
Indian shares closed down 7.07%, despite an injection of liquidity from the country's Reserve Bank.
Copyright Agence France-Presse, 2008