Same Story Worldwide: Nervous Trading, Plunging Stock Prices
Share prices took a nose dive in trading around the world today, with investor confidence shaken after a record single-day decline on Wall Street last Friday. The dollar also dropped.
Wall Street’s tumble continued early today, as waves of panic selling devastated the stock market in one of the worst days in its history.
Stock prices plunged on the London Stock Exchange in panicked selling. The dollar fell to a six-month low, and gold soared to nearly $480 an ounce, its highest level in almost five years.
The Financial Times-Stock Exchange’s 100-share index plummeted 249.6, or 10.6% to close at 2,052.3. The decline was five times as large as London’s previous record one-day fall and was larger than Wall Street’s fall over the course of last week. London market indexes weren’t computed on Friday because trading was suspended following a hurricane that caused a blackout in London.
Share prices on the Frankfurt Stock Exchange and the Amsterdam Bourse also plunged in nervous trading.
In Hong Kong, panic selling swept the stock exchange as the market index registered a record one-day plunge and fell 11%.
Tokyo’s 225-share market average nose-dived 620.18 points to 25,746.56, its sixth-worst fall. On Friday, it fell 61.48 to 26,366.74. Monday’s declines led advances nearly nine to one on volume of 600 million shares, compared with Friday’s 700 million.
“There was just one factor--New York,” said a senior broker at Nomura Securities, referring to the three-day, 261 point fall in the Dow Jones industrial average to 2,247. The index has fallen 17.5% since Aug. 25.
Securities houses, communications, insurance, bank, airline, retail, pharmaceutical, real estate, and credit and leasing shares were the biggest decliners.
“In the dealing rooms, brokers are just sitting with two phones in front of them, doing nothing,” said Robert Karr, broker at New Japan Securities. “They don’t want to sell; Japanese never do.”
“It is ‘hands off’ until tomorrow when we see what New York has done overnight,” said a broker at Sanyo Securities. “If New York falls then Tokyo is certain to follow.”
The dollar slid 1 yen on the Tokyo Foreign Exchange Market, closing at 141.35 compared with last Friday’s close of 142.35 .
The close was the dollar’s lowest since 141.20 yen on Sept. 3. It had climbed as high as 147.20 on Oct. 5.
Spot trading in Tokyo today totaled $8.434 billion, up from Friday’s $4.849 billion.
Traders in Tokyo said the dollar’s fall followed indications by Treasury Secretary James A. Baker III in a television interview Sunday that the United States might allow the dollar to fall against the West German mark rather than allow U.S. interest rates to climb as have West German rates.
In Hong Kong, the Hang Seng index fell 420.81 points to 3,362.39, a one-day record. Turnover totaled 4.185 billion Hong Kong dollars ($537 million U.S.), up 12% from Friday.
The Dow Jones industrial index registered a record decline of 108.36 points Friday, which analysts attributed to a buildup of worries about international trade and interest rates.
