Irish shares slump 75pc from peak as ISEQ hits 13-year low
Broker Simone Wallmeyer reacts at the stock exchange in Frankfurt yesterday
THE Dublin market lost another 4.36pc of its value after a big sell-off in shares left the ISEQ Index at a new 13-year closing low.
The sell-off was sparked by a wave of negative sentiment which started in the bank sector and spread to industrial stocks.
By the close of business, Dublin stocks had a combined worth of just under €32bn compared to their total value of €127bn at the peak of the market in February of last year. Since then values have slumped by a total of 75pc.
Banks were the main losers, falling amid continued speculation that the shareholdings will be massively diluted in a recapitalisation plan being put together by the Government.
The market had opened to news of another torrid session in Japan where the Nikkei average fell 6.9pc for its biggest one-day loss in a month. Japanese exporters such as Canon were nailed by a stronger yen and fears that a worsening global economy will hit earnings.
A rally later on Wall Street came too late to save the European markets -- shares in New York picked up late in the session after signs of a breakthrough in talks to save the nation's auto firms.
Dublin was not alone, however, as shares fell around Europe, sending the Dow Jones Stoxx 600 Index to the lowest level since 2003, after the highest US jobless claims since 1992 heightened concern corporate profits will crumble.
Retreat
Major European stocks such as BHP Billiton Ltd and Royal Dutch Shell Plc sank more than 5pc as the unexpected increase in unemployment and retreat in a gauge of leading US economic indicators dragged oil below $50 a barrel.
Deutsche Bank AG and ING Groep NV dropped more than 8pc after Citigroup Inc's plan to buy troubled investment-fund assets fuelled speculation of more bank writedowns.
The Stoxx 600 declined 3.6pc to 186.75, the lowest closing level since April 2003. More than $32trn has been erased from the value of global equities this year.
National benchmark indices retreated in all of the 18 western European markets. The UK's FTSE 100 lost 3.3pc. Germany's DAX fell 3.1pc, while France's CAC 40 sank 3.5pc.
Declines in emerging markets surpassed developed countries on concern lower metal and oil will cripple their earnings from exports. The Micex Index in Russia, the world's largest energy supplier, slid 4.4pc.
Federal Reserve policy makers lowered forecasts for US economic growth and employment in 2009, saying the outlook had "worsened signif- icantly" since June, according to records released late yesterday.
The US economy would contract through the middle of next year and the unemployment rate reach 7.1pc to 7.6pc, accord-ing to the figures. The Stoxx 600 has fallen 49pc in 2008, headed for its worst year since 1987, as global writedowns and credit losses topped $966bn.
- Pat Boyle
