Global stocks went into freefall on Friday, with double-digit losses in Frankfurt, London and Tokyo, on fears that the financial crisis was spiralling out of control, dealers said. Wall Street opened with sharp losses before limping into positive territory, only to plunge again on comments from US President George W. Bush. European shares closely tracked the New York Stock Exchange, going into a frenzied freefall after the start of trade on Wall Street, briefly pulling back and then plummeting. The Dow Jones Industrial Average was down 1.49 percent at 8,451 while the Nasdaq exchange had lost 2.72 percent to reach 1,600.39. The Dow had been clawing back lost ground, after an earlier plunge of 7.9 percent, until Bush blamed “uncertainty and fear” for much of the global financial meltdown and insisted US authorities had the tools to confront the crisis. Worries are understandable but “anxiety can feed anxiety and that can make it hard to see all that is being done” to address the problem, he said, promising: “We can solve this crisis, and we will.” In Europe, Frankfurt, London and Paris plunged again by about 10 percent after the Wall Street open before paring their losses but remained down by 6.0-7.0 percent in value. “Sadly it is now impossible to call the bottom of this market rout,” said Howard Wheeldon, senior strategist at BGC Partners in London. “Irrational fear has gripped (investors) and it seems that markets will now trash almost anything that walks. For now it is unstoppable.” In the Far East, Tokyo suffered the biggest daily drop for two decades after shedding 11 percent at one stage, while in Europe, Frankfurt and London tipped more than 10.0 percent lower. “It's very close to panic. We are drowning in a sea of red numbers,” said Barclays Wealth analyst Henk Potts. “Investors are concerned about the exacerbation of the credit crunch and the gloomy forecasts for economic growth. “The reality is that most investors have been spooked by the sheer pressure that the credit crunch is putting on the global economy.” Tokyo nosedived, as the credit crisis claimed its first Japanese financial institution with the bankruptcy of Yamato Life Insurance, driving the Nikkei stock index down 9.6 percent by the close. Hong Kong lost 7.2 percent as panic swirled about the state of the global banking industry. In Europe, investors were also reacting to this week's nationalisation of Icelandic banks Glitnir, Kaupthing and Landsbanki, victims of the crisis. Shortly after the open, London and Frankfurt wiped out more than 10 percent of their value and Paris more than nine percent. Investors dumped shares across the globe in scenes reminiscent of the 1987 stock market crash. “The last time I can remember this in the market was 1987,” said Justin Urquhart-Stewart, marketing director at Seven Investment Management. London's FTSE 100 index of leading shares nosedived 10.20 percent to as low as 3,873.99 points – the first time below 4,000 points since July 3, 2002 – before pulling back to show a loss of 7.81 percent at 1045 GMT. “Today looks to be starting off as a complete bloodbath. The FTSE was obliterated on the open,” said Capital Spreads managing director Simon Denham in London. Japanese Prime Minister Taro Aso warned the slump “has reached a point where it affects the real economy.” The Bank of Japan pumped a total of 4.5 trillion yen ($45.5 billion ) into money markets, the most since the financial crisis started, while the stock exchange briefly halted some trading in futures and options. Singapore eased monetary policy for the first time in more than four years. Markets were hoping for even more radical action from finance ministers and central bankers in the Group of Seven rich nations, which was to meet in Washington later Friday after emergency interest rates cuts by top world central banks this week failed to calm the turmoil. The price of safe-haven gold rose while oil prices fell on worries about the prospect of weaker demand and as investors liquidate assets. Brent North Sea crude sank below the 80-dollar mark for the first time in about a year.
