LONDON, 18 May 2004 — World stock markets suffered heavy losses yesterday as investors sought shelter from rising oil prices, looming interest rate hikes and violence in Iraq.
Markets in Asia led the way lower as investors also showed concern over the health of the Chinese economy, while Indian shares plunged on worries about the incoming Congress-led government’s economic reform policies
News of the assassination of the current head of the US-appointed Iraqi Governing Council, Izzedin Salim, added to the nervous mood on world market.
“The markets, for whatever reason, chose to ignore the prospect that sooner or later interest rates would rise,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities. “Now they’re faced with the prospect that they’re going to rise sooner rather than later, and they don’t like it.”
In New York the Dow Jones Industrial Average dropped 0.93 percent to 9,919.7 points in early deals and the technology-laden NASDAQ composite sank 1.46 percent to 1,876.4 points.
European markets were also under pressure. In London the FTSE 100 index dropped 0.98 percent to 4,398.4 points in late deals, the Frankfurt DAX 30 index lost 1.63 percent to 3,741.1 points and the Paris CAC 40 fell 1.62 percent to 3,545.1.
The rout started in Asia. In Japan the Nikkei-225 shed 3.18 percent to close at 10.505.05 points. Hong Kong’s Hang Seng ended 2.74 percent lower at 10,967.65, Seoul’s composite index lost 5.14 percent to finish at 728.98 and Taiwan’s weighted index shed 5.10 percent to close at a nine-month low of 5,482.96 points.
Indian share prices closed down 11.14 percent, the biggest one-day point fall in the market’s history.
