Tumbling markets – where will it end?

March 2, 2009

Stocks went in a tailspin again today as banking stocks tumbled after AIG posted a record loss and HSBC announced Britain’s largest ever rights issue.

Banking stocks led the FTSE decline after HSBC’s plan of a deep-discount rights issue and embattled life insurer AIG announcement of a $61.7 billion quartely net loss, the biggest in U.S. corporate history.

The sell-off fuelled by fears that the global financial crisis shows no signs of abating pushed the Dow Jones industrial average to its lowest level since April 1997 intraday,  while  the FTSE 100 ended trading at its lowest closing level in 6 years.

“This market is running very, very scared,” said Howard Wheeldon, a senior strategist at BGC Partners. “There is just no good news out there.”

Other analysts described markets as “having gone into survival mode, just like the companies”.

(FTSE 100 since 2004/Reuters Graphics)

How much further do markets have to fall before there is a light at the end of the tunnel? When would you consider buying equities again?


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Posted by Rob | Report as abusive

Buy on the bad news.
Keep some money aside to buy more on the NEXT bad news.
Sell in 4-5 years’ time when the bankers start getting big bonuses again.

Posted by Jason | Report as abusive

Its the people already invested that I feel sorry for, like those relying on growth for pensions and income, who have seen their returns more than half. Also spare some thought to those people who rely on interest from deposits, they have seen their income fall dramatically with little chance of rates rising in the forseable future! For those with cash, and time on their side, get ready to buy, this is the biggest opportunity you are likely to see for a long time!

Posted by Richard | Report as abusive

Now is the time – the downturn will not be as bad as everyone feared in my opinion.

Posted by Jeremy | Report as abusive

I think the FTSE will be flirting with 3000 before too long, but it all depends on how much more bad news comes out, and when we start to hear good news. I don’t expect much of the latter before mid-2010. Anyone who says there’s going to be a recovery in 2009 (leaving aside dead furry animals bouncing here and there) must be an estate agent.

Posted by Matthew | Report as abusive

agree with Jason, Richard and Jeremy – buy on a downturn and sit and wait for the up. If everyone did the same the markets would automatically improve!

Posted by Andrea | Report as abusive

The markets will fall further until confidence in stocks returns.

The UK Government must take some of the blame for the way the UK Banks behaved as they originally deregulated the whole banking system in the first place.

The banks have to be regulated especially regarding dodgy overseas investments which was the root cause of the problem in the first place and not just the sub-prime mortgage fiasco.

I am already buying and selling UK Equities and made a gain of 33% over the last 3 months on some defence industry shares.

Don’t think I would have got that invested in a Bank or Building Society.

In order to make any kind of returns will require a higher element of risk and that will be the case for the next five years in my opinion.

People have been used to shares going up in value without making big falls and making easy money over the last 20 years.

Posted by Phil | Report as abusive