TUESDAY, 10.30AM
THE Johannesburg Stock Exchange experienced its worst crash ever this morning, with the all-share index down 12% – double yesterday’s drop, and far worse than 1987. At 10:30am the All share index was down 813 points at 5950, the financial index had dropped 1273 points at 8512, the industrial index was down 966 AT 7344, and the gold index down 50 points at 845.
“We’re taking a bath,” said Jarrod Cahn of Cahn Shapiro. “There’s no doubt that what we’ve got here is a crash.” Cahn says however, that the fairly low volumes show the drop is mainly due to private clients who are panicking, and institutions are not involved that much. Also, the new technology makes it easier to trade than in 1987.
” We’ve lost all our gains we’ve made this year,” he said. “But at these levels you can’t sell – it’s too cheap.” In New York, the Dow industrials plunged overnight in their biggest point drop ever, falling 554.26 points, or 7.18%, to 7,161.15. The fall twice triggered the circuit breakers at the New York Stock Exchange, which are designed to stabilise sharp market moves.
With Hong Kong investors already panicky, the New York fall savaged the key Hang Seng index at the opening on Tuesday.
The index opened 849.14 points, or 8.09%, lower at 9649 and soon slid 12.42%. Just before midday it plunged 16.41% before recovering slightly to end the morning session down 1621.80 points, or 15.45%, at 8876.40.
Tokyo’s stocks were battered, with the key Nikkei 225-share index shedding more than 3% in early trade. At 0500 GMT, the index was down 760.44 points, or 4.46%, to 16,277.92.
Elsewhere, Asian stock markets reeled from Wall Street’s rout overnight. Markets in New Zealand and Australia were the first to react to the 554.26 point fall in the Dow Jones Industrial Average, with each losing more than 10%.
A rapid slide in Taiwan stocks was halted by an exchange mechanism which limits a fall to 7% a day. The key index ended down 452.52 points, or 5.91%, at 7210.01.
Singapore shares fell throughout the session, and were down 127.13 points, or 7.85%, at 1492.77 at 0500 GMT.
Malaysian stocks were off 42.09 points, or 6.07%, to 651.30, while South Korean stocks nosedived below the 500 level in early trade, and were off 38.06 points, or 7.17%, at 492.41.