Shares in Asia and Europe fell on Friday, heading for their worst month ever, while the low-yielding yen shot up as Japan's interest rate cut failed to quell concerns about the deteriorating global economic outlook.
The Bank of Japan joined a global easing cycle by trimming interest rates by 20 basis points to 0.3 percent, but disappointed many who had expected a bigger quarter point cut.
The move followed the Federal Reserve's decision to cut interest rates to 1 percent this week -- its lowest level since June 2004 -- to stave off a prolonged recession.
The euro zone, Australia and Britain are expected to follow suit next week.
However, investors feared a round of rate cuts was not enough to stem the flow of worsening corporate earnings and bolster consumer consumption in major economies which might be already in recession.
In response, oil and commodities fell sharply. U.S. crude oil fell 3.6 percent to $63.58 a barrel, down some 55 percent from its record high around $147 set in July. Gold fell to $724.10 an ounce and was set for its largest monthly fall in more than 30 years.
Friday, October 31, 2008
World Share Prices Set for Worst Month Ever
Reuters is reporting that October was the worst month ever in financial history. Dating back to 1920, there are only 4 comparable months in terms of market volitility, and loss of wealth that I could find. The first was September 1931 where the market was down 29.94%, second was October 1987 where the market was down 21.76%, third was May of 1940 where the markets were down 23.95% and last was March of 1938 where the market was down 25.04% which would mean that right now, October 2008 is the single worst month in financial market history.