World markets plunge after buy-out

My Account
Logout

Create an Evening Standard Account

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Welcome! Sign in here

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Forgot your password ?

Registration

* indicates fields that are mandatory

Email *

Password *

Confirm Password *

First name *

Surname *

Postcode *

Country *

Mobile phone number

Username *

Gender *

Year of birth *

When you sign up...

You will have access to all our online competitions, discounted offers and can post comments on our site.

You will also receive The Weekender newsletter sent every Thursday - it’s full of fantastic offers and ideas for the weekend. You can update your email preferences in your account page when you log in.

Other newsletters and emails

Homes & Property Newsletter - Yes I want to receive the weekly email with all the latest news on property in the capital

Occasionally we would also like to send you relevant emails detailing specific offers either from ourselves or carefully selected partners. If you would prefer not to receive these then please tick the appropriate boxes below. We will never pass on your details.

I do not want to receive additional offers and information from the Evening Standard

I do not want to receive additional offers and information sent by Evening Standard on behalf of carefully selected partners

Terms and Conditions

* I have read, understood and agree to be bound by the terms and conditions of Evening Standard

Registration

Mail Sent for Registration Confirmation.

A confirmation email has been sent. Please activate your account by clicking on the activation link sent in your mail box.

But the Dow Jones industrials recovered towards the end of trading to finish up about 21 points, despite being down 200 points in early trading.

The rollercoaster US session came after JP Morgan Chase & Co's government-backed buy-out of Bear Stearns at the weekend and has had a knock-on effect on other markets worldwide, including the London Stock Exchange.

The buy-out was aimed at averting bankruptcy by Bear Stearns and a spreading crisis of confidence in the global financial system sparked by problems in the US sub-prime mortgage market.

The Federal Reserve, the US central bank, backed the buy-out and also lowered the rate it charges to lend directly to banks by a quarter-point on Sunday night. It is also expected to lower its general interest rates by up to 1%.

In the UK, the FTSE 100 index ended down 3.9% amid investors' fears that the collapse of one of Wall Street's biggest names means that the credit crunch is intensifying.

The Bank of England said it would offer an extra £5 billion of reserves into the short-term money market because of conditions, and the Bank of Japan and the Royal Bank of Australia also made more funds available.

In London, a raft of major banks were among the Footsie's biggest fallers, with Barclays off 9%, Halifax Bank of Scotland down 13% and Royal Bank of Scotland 9% lower.

The credit crunch has now seen the value of the UK's top 100 companies fall by nearly 20% since the Footsie reached seven-year highs above 6,700 in June last year.

Prime Minister Gordon Brown has moved to assure markets, saying in Parliament that Britain will continue to take "whatever action is necessary" to maintain economic stability.