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7 Oct, 2008 06:10

Global Markets take a breather: RTS and Micex tentative after morning trading halt

Global Markets take a breather: RTS and Micex tentative after morning trading halt

Tuesday is seeing global markets continue to ease in the wake of a massive selloff which engulfed them on Monday. In Russia the Federal Financial Markets Service halted trade on the RTS and Micex until 13.00 Moscow time after Mondays massive slump of 19%

Upon resumption of trade the RTS and Micex were edging higher after Mondays massive falls.

In Asia the Nikkei and Hang Seng fell 3% and 5% in the wake of the falls in the U.S.  Some relief for investors came from the Reserve Bank of Australia which slashed overnight rates by 1000 Basis points or 1% and engendered some hope that a coordinated global response by the worlds central banks may be in the pipeline.  Sydney finished the day 1% higher and the news helped take some of the sting out of losses on other exchanges.

The FFMS suspension of trade in Moscow turned attention to Europe where early trade saw the FTSE 100, Dax and CaC continue to fall with financial stocks again bearing the brunt of selling.  In London reports that the Royal Bank of Scotland has approached the British Government about a capital injection has shredded much of what little investor confidence remains in British banking, and sees RBS down more than 30% in mid morning trade, with HBOS, Lloyds TSB, and Barclays all more than 10% down. 

In addition to the trading halt the FFMS introduced new technical guidelines meaning both would halt trade again if the indexes moved more than 5% from the previous days closing levels.  At 14.00 Moscow time major share movements on the Micex included Gazprom up 5%, Sberbank up 2.5%, Lukoil up 2.5%, Rosneft up 2.2% and Rostelecom up 5%, with Norilsk Nickel down 2%.