Banking & Saving - Global shares continue to plummet

Tokyo's Nikkei stock index dropped more than 11% today, the largest decline in 20 years and the second-biggest percentage loss ever, as increasing concerns of a global recession hit world markets.

The benchmark index lost 1,089.02 points, or 11.41%, closing at 8,458.45, cancelling out many of the gains seen earlier on in the week.

It was the Nikkei's steepest fall since the Black Monday crash of 1987.

This came after Wall Street reported its biggest percentage drop in 20 years and its second-largest points fall ever recorded overnight.

In early trading, London's FTSE 100 fell 2% while the Cac 40 in Paris and the Dax in Frankfurt both fell 3%.

Shares in Hong Kong lost 7.6%. South Korean, Australian, and Indian indexes all dropped by at least 4%.

Australia's main share index closed down by 6.7% and India's main index finished down by 4%.

Hiroaki Hiwata, a stock market strategist at Toyo Securities said that after such a brutal US selloff,  Japanese stocks would inevitably follow suit.

"The key to the outlook is whether investors focus on the financial strength of some Japanese companies rather than on external factors," Hiwata said.

Japan's central bank injected 600 billion yen ($6billion) into the short-term financial market in an effort to sustain the amount of credit made available.

Takashi Ushio, head of the investment strategy division at Marusan Securities, said: "Last week people were panicking over the financial system, nobody really knew what would happen. But now it's the real economy," as quoted by Reuters news agency.

Wall Street's Dow Jones index dropped 7.87% yesterday after US retail sales declined more than  anticipated. The Federal Reserve chairman Ben Bernanke warned that a recovery from the financial slowdown "will not happen right away."

Many analysts now believe that a recession in the US is unavoidable as the financial turmoil weakens the economy despite a supposed US$700billion “rescue” plan.

Many people are giving up on the stock market all together and moving to a safer option by selling up and storing their cash in high interest savings accounts.

Published by Sam Gooch