The crisis that has afflicted Asian markets since October blew up again yesterday, causing severe weakness across global markets already under pressure from the latest sell-off on Wall Street.
The latter, which fell 99 points on Thursday, gave global markets another fright yesterday. Some of the more pessimistic dealers took the view that a 5 per cent-plus slide on the Dow was a possibility. "Whatever happens, next week will see London and New York under real pressure," said one.
US stocks suffered on concerns about the Asian crisis and in the face of yet another profits warning from a hi-tech group.
The latest US non-farm payroll report showed 370,000 new jobs created during the month, compared with a consensus forecast of around 200,000. However, Treasury bonds rallied, given the doubts that the US Federal Reserve would raise rates in the face of the Asian crisis.
London could not resist those downside pressures and fell sharply, with the FTSE 100 index finishing 98.8 or 1.9 per cent lower at 5,138.3, wiping out the strong gains recorded earlier in the week. The weakness in British stocks extended to the second-tier companies. The FTSE Mid-250 index settled at the day's low, finishing 15.4 off at 4,864.6. Over the week, the index gained 56.3, with dealers reporting some significant switching out of the leaders.
The SmallCap index managed to end with a modest gain of 3.0 to 2,348.2 for a rise of 1.2 per cent over the week.
