Stock markets:Investors breathed a sigh of relief as the week ended yesterday, closing their books on what one dealer described as one of the rockiest rides he had seen in a long time.
The Iseq index of Irish shares closed down more than 4 per cent, a move that wiped €4.5 billion off its value yesterday alone. Elsewhere, the situation was similar with stocks around Europe plummeting and surrendering what was left of their 2007 gains.
The declines emanated yet again from concerns that problems in the US subprime mortgage sector are spreading to other parts of the economy. Subprime mortgages are the riskiest property loans and several major US companies and even some European banks have in the past few months announced losses from exposure to subprime loans.
Even a second day of financial intervention by central banks around the developed world failed to stem the declines. The money, which amounted to billions of euro, is designed to ensure the banking system has enough money to function.
In equity markets, Britain's FTSE 100 dropped 3 per cent, turning negative for the year for the first time since 2002.
In Germany, the DAX lost 1.7 per cent, while France's CAC 40, which also turned negative for the year, tumbled 3 per cent.
The pan-European FTSEurofirst 300 index was at one point down as much as 2.9 per cent, its biggest one-day slump since May 2003, although it recovered some ground to close down 1.8 per cent. The index, which is now lower than it was at the beginning of the year, has lost 9.4 per cent since reaching a 6½ year high on July 13th, and is on track for its worst yearly performance in five years.
Yesterday banking shares were particularly badly hit, with Dutch bank ABN Amro dropping 7 per cent, Royal Bank of Scotland closing 4.5 per cent lower and Barclays losing 5 per cent.
The situation was similar in the Republic where AIB, Bank of Ireland and Anglo Irish lost between 4 and 6 per cent each. - (Additional reporting Reuters)
