Tumbling markets – where will it end?
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?