World Markets Plunge in Credit Crisis

NEW YORK(RUSHPRNEWS)06/10/2008–Stock markets fell sharply around the world Monday because of fears that the U.S. credit crisis is spreading and could soon topple more major banks in Europe.In Asia, Japan’s Nikkei index dropped to a four-year low and Hong Kong’s Hang Seng fell almost five percent.

European stocks also tumbled, with the major indexes in Britain, France and Germany all sliding more than five percent at one point in the trading day.

Russia’s leading stock exchange temporarily halted trading after plunging more than 15 percent.

Fears about the overall economy also caused oil prices to drop – hitting an eight month low (of less than $90 a barrel) during electronic trading in New York.

The U.S. Federal Reserve announced Monday that it was taking additional steps in an effort to make it easier for banks to lend money.

Investors have worried for weeks that a $700 billion government bailout approved Friday in the United States will not do enough to avert a global economic crisis.

The U.S. plan calls for the government to buy faltering mortgage-related investments from financial institutions. Officials say removing these bad investments will restore the financial health of banks and investment firms, and will encourage banks to resume lending. That will ease the tight credit market that threatens to stall the economy.

European leaders are pledging to bail out troubled banks and protect depositors. But they failed to agree on a united response to financial crisis during a meeting on Saturday.

Italian government officials say Monday that European leaders are working on a joint statement to lend support the tumultuous financial markets.

 

By VOA News -Some information for this report was provided by AFP, AP and Reuters