Russian fears send world markets diving
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.FEARS of political instability in Russia helped to put the skids under the world's stock markets yesterday, with significant falls seen in London, New York, Hong Kong, Frankfurt and Paris.
More than pounds 7bn was wiped off the value of London shares, with the FT-SE 100 closing 37.5 points lower at 2,915.9. At one stage the index was nearly 50 points down. Shares also met profit-taking ahead of Tuesday's Budget.
The New York market could offer London little succour, with a sharp fall in early trading. By the close the Dow Jones Industrial Average had recouped more than half of the day's losses to end down 29.18 at 3,427.82 points. Wall Street was also depressed by an unexpectedly sharp 0.4 per cent rise in US producer prices in February, the largest since 1990.
The falls began in Hong Kong, where share prices fell on the news that the Governor, Chris Patten, intended to press on with democratic reforms despite failing to open talks with China. The Hang Seng index ended more than 200 points lower at 6,170.4.
Rumours of a realignment of the European exchange rate mechanism circulated towards the close of trading, following heavy selling of the Portuguese escudo and a weakening in the franc. The Bank of France was rumoured to have intervened to keep the franc above Fr3.40 per mark.
The markets showed little reaction to British gross domestic product figures, released by the Central Statistical Office. These showed domestic inflationary pressure in the last three months of 1992 more subdued than at any time for 30 years.
The GDP deflator, the broadest measure of domestic pressure on prices, fell by 0.9 per cent in the fourth quarter, the largest fall since 1961. But the deflator will be pushed up by higher import prices.
Separate figures from the Department of Employment showed that the amount spent on wages and salaries to produce each unit of factory output in the fourth quarter was lower than a year ago, for the first time since 1986.
GDP grew by 0.2 per cent in the quarter. Rises of 0.3 per cent in consumer spending and 0.2 per cent in government spending outweighed a 0.8 per cent fall in investment. Domestic demand fell 0.3 per cent because companies met more demand from stocks rather than new production.
The rise in consumer spending came as real personal disposable incomes fell 0.8 per cent. Savings as a proportion of personal income thus fell 0.9 points to 11.4 per cent. The higher ratio in the third quarter may have reflected higher redundancy payments that were not spent.
Trading profits - excluding rises in the value of unsold goods - were barely changed in the fourth quarter at pounds 19.7bn.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments