London and European markets are in freefall upon opening this morning, continuing a chaotic 12 hours for global indices following the rejection of the US $700bn bank bail-out package.
At 8.30am, the FTSE100 had already plunged 144.95 points, or 3%, to 4673.82. HBOS, RBS and Lloyds TSB are among the hardest hit.
Paris’ CAC is down 2.57% to 3851.68, while Frankfurt’s Dax is 2.4% lower to 5667.86.
It follows the largest ever points fall for the Dow Jones on Monday, which plummeted 777.68 points, or 6.98%, to 10,365.45. The broader S&P 500 fell 8.81%, while the tech-heavy Nasdaq dived 9.14%.
Asian stocks continued the decline on Tuesday, with Japan’s Nikkei 4.12% lower and Sydney’s S&P500 down 4.3%.
While US markets were already suffering a sharp decline in early Monday trading, news Congress rejected the bail-out sent shockwaves through Wall Street.
The bail-out vote was defeated in the house 228 to 205, with just 65 Republicans supporting the bill and 133 turning against party leader President Bush. Democrats backed the bill 140 to 95.
It is now expected US Treasury Secretary Hank Paulson will reconvene with party leaders to quickly thrash out a deal to take back to Congress as early as Thursday.
“I’m disappointed in today’s vote, but leaders on both sides of the aisle worked hard. I’ve spoken to them and I know they share my great disappointment,” Paulson says.
“Our tool kit is substantial but insufficient. We’ve got much work to do. This is much too important to simply let fail.”
Filed under: Economy, Financial, Mortgage News, Mortgages
