Recession fears hit world markets

Fears of a synchronised recession in developed countries and increased risks of bank failures triggered another round of selling on global equity markets.

The Dow Jones Industrial Average fell by 8% on Wednesday, followed by the Nikkei losing 11% on Thursday.

Other Asian markets took their cue with Hong Kong’s Hang Seng and Singapore’s Straits Times Index both falling 5%, Australia’s All Ordinaries was down 7%. India’s Bombay Sensex was down 2% for the day. All the major European markets opened in the red. In the crude oil markets, Nymex crude futures hit a 13 month low of US$73.00/barrel, which is over a 50% drop from the US$147.22 it reached in mid-July.

In Colombo, the ASPI lost 42 points (-2.1%), to cross below the 2,000 mark once more, while the MPI which tracks the market’s most liquid stocks, lost 47 points (-2.1%) to close at 2,213.

Turnover for the day was Rs 103 million, with John Keells Holdings (Rs 24.1 million), Maskeliya Plantations (Rs 10 million) and Chevron Lubricants (Rs 8.1 million) accounting for the bulk of the turnover. Maskeliya closed down at Rs 26.75, while Chevron Lubricants closed at Rs 106.00