LEHMAN BROS FILES FOR BANKRUPTCY !
Share prices in Europe and Asia have fallen sharply in the midst of the financial turmoil over the fate of the US investment bank Lehman Brothers.
The UK's FTSE 100 index fell 2.7% in early trade, France's Cac 40 index shed 3.4% and Germany's Dax dropped 2.8%.
In Asia, the key Australian share index ended down 1.8%, and in Singapore the STI dropped 2.3% in morning trade.
In Taiwan, the benchmark share index closed down 4%, and in India share prices fell by more than 5% on opening.
Several of Asia's major stock exchanges - in Tokyo, Hong Kong, Shanghai and Seoul - were closed for holidays.
In markets that were trading, banking, insurance and financial sectors suffered most after Lehman Brothers, the fourth-largest investment bank in the US, said it would file for bankruptcy protection.
Meanwhile the US dollar fell in Asian trade on Monday, on concerns about the US financial system's stability.
The dollar fell 2.3% to 105.45 yen - the biggest one-day percentage fall since early 2002. The euro also gained against the dollar, at $1.4479, up 1.7%.
The pound rose to $1.8040, from $1.7946 on Friday.
The Bank of England said it was monitoring conditions in sterling money markets and would act to stabilise them if needed.
The European Central Bank said it would intervene in eurozone money markets if necessary.
Anantha Nageswaran, head of investment research at Bank Julius Baer, said: "The dollar rally over the last two months was unsustainable and it was brought about by short-term liquidation pressures by many hedge funds and because of a mistaken feeling that the US economic numbers had turned the corner."
Lehman Brothers has suffered losses of billions of dollars in the sub-prime crisis, and has seen its share price plummet during recent months.
A consortium of international private sector banks and securities firms announced a new $70bn loan fund, intended for use by financial companies to help ease the credit shortage.
The US Central Bank, the Federal Reserve also made new moves to ease access to emergency credit for struggling financial companies, broadening the types of securities financial institutions can use to obtain emergency loans.
BBC NEWS REPORT
The UK's FTSE 100 index fell 2.7% in early trade, France's Cac 40 index shed 3.4% and Germany's Dax dropped 2.8%.
In Asia, the key Australian share index ended down 1.8%, and in Singapore the STI dropped 2.3% in morning trade.
In Taiwan, the benchmark share index closed down 4%, and in India share prices fell by more than 5% on opening.
Several of Asia's major stock exchanges - in Tokyo, Hong Kong, Shanghai and Seoul - were closed for holidays.
In markets that were trading, banking, insurance and financial sectors suffered most after Lehman Brothers, the fourth-largest investment bank in the US, said it would file for bankruptcy protection.
Meanwhile the US dollar fell in Asian trade on Monday, on concerns about the US financial system's stability.
The dollar fell 2.3% to 105.45 yen - the biggest one-day percentage fall since early 2002. The euro also gained against the dollar, at $1.4479, up 1.7%.
The pound rose to $1.8040, from $1.7946 on Friday.
The Bank of England said it was monitoring conditions in sterling money markets and would act to stabilise them if needed.
The European Central Bank said it would intervene in eurozone money markets if necessary.
Anantha Nageswaran, head of investment research at Bank Julius Baer, said: "The dollar rally over the last two months was unsustainable and it was brought about by short-term liquidation pressures by many hedge funds and because of a mistaken feeling that the US economic numbers had turned the corner."
Lehman Brothers has suffered losses of billions of dollars in the sub-prime crisis, and has seen its share price plummet during recent months.
A consortium of international private sector banks and securities firms announced a new $70bn loan fund, intended for use by financial companies to help ease the credit shortage.
The US Central Bank, the Federal Reserve also made new moves to ease access to emergency credit for struggling financial companies, broadening the types of securities financial institutions can use to obtain emergency loans.
posted by jackaranda at 10:57 am
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