Friday, August 28, 1998 Published at 22:08 GMT 23:08 UK
Business: The Economy
A wild week on the world's markets
The asset price bubble is bursting
The last week of August was a bad week for the world's financial markets. All around the globe, share and currency markets were in turmoil triggered by the devaluation of Russia's rouble.
Unlike past weeks, when a day of market trouble was invariably followed by a strong rebound, this time investors saw billions of dollars melting away, but no bottom of the market.
Nonetheless, it was a rollercoaster with share prices swinging violently up and down.
But then the FTSE-100 index began to falter, dropping 1.93% on Wednesday and a massive 3.2% on Thursday. Finally on Friday, the Footsie lost another 2.2%.
On the week London's share index was down 4.1%. But compared to July 21, the market's all-time high at 6179 points, the FTSE 100 is down 810.5 points or 13%.
Heavy trading volume confirmed the trend: Wall Street was in for another correction - 445 points or 5% on the week.
New York's main share index, the Dow Jones, is now 1,286 points below its July 17 record high of 9,337.97, a drop of 13.8%.
Germany's main stockmarket was particularly hit by the crisis in Russia. German banks are Russia's largest lenders, and shares in Frankfurt had a rough ride.
The Dax index lost 7.8% on the week - and a whopping 18% from the market's all-time high in July.
Where Wall Street goes, Paris follows say the traders, and past week made no difference. The CAC-40 index was down 234 points - 5.7%.
Hungary was particularly hard hit. The Budapest stock market lost 28.1% within just one week. One trader said: "Basically, the market now is a casino."
Czech shares were a bit less troubled. Some traders say the sluggishness of the market during recent months is now showing benefits, as prices did not drop as fast as on other markets. The broader PX-50 index was down 15.27% on the week.
In Poland, the Warsaw stock exchange plunged by 17.5% within seven days, to the lowest level since mid-1996.
Ukraine's fledgeling share market, however, is now practically non-existent. The country is Russia's neighbour and main trading partner. The Kiev stock market is at an all-time low, and there are hardly any buyers left.
Japan is the other big worry on investor's minds who wonder whether the country's government will manage to institute tough financial reforms.
The Nikkei index lost 1,382 points on the week or 9%, yet another abysmal performance. And there is no end in sight.
The Hang Seng is in trouble. Massive intervention by the territory's administration is distorting the true market situation, and that is the only reason why the Hang Seng managed a small rise during the past week.
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