Bloodbath as markets slump over fears of 'double dip'
Published 09/08/2011 | 05:00
WORLD markets slumped to their lowest levels for three years as fears grew about a double-dip recession.
The last week's declines have wiped $1.94trillion off the value of shares, particularly in the US, where the main index closed down 6.7pc last night.
US markets have lost almost a fifth of their value since the start of the summer. Some of Ireland's largest companies were also caught up in the turmoil yesterday, with Elan dropping 9pc and Kerry down 4.4pc.
A defiant address by US President Barack Obama failed to stop the plunge. Banks in the US dropped by almost 10pc. One of the biggest US losers was Bank of America, down by over 20pc.
While the US was engulfed in instability, Europe fared better as the ECB's bid to calm nerves brought down European borrowing costs, particularly for Spain and Italy. The ECB bought bonds of both countries and Ireland also benefited.
The market implosion was caused in the main by the US losing its prized AAA credit rating over the weekend.
Mr Obama said the only thing holding back the US from solving its problems was political disagreement. The key event today will be a statement from Ben Bernanke, the chairman of the Federal Reserve.
European markets slid 4.1pc, the most in more than two years.