Global stock markets suffered another vicious sell-off Wednesday in extremely volatile trade, as investors brushed off a coordinated round of interest rate cuts across the globe. After a calamitous day in Asia, Wall Street plunged at the open before rebounding slightly amid caution over the international bid to unblock frozen credit markets. Frankfurt, London and Paris all tumbled by more than 4.0 percent as initial optimism over the rate cuts evaporated. But stocks in Saudi Arabia, which was still trading when the cut was announced, rebounded strongly as investors looked for a similar cut by the Saudi Arabian Monetary Agency (SAMA), the Kingdom's central bank. After slumping below 6,000 points for the first time in more than 52 months and shedding more than eight percent, the Tadawul All-Shares Index closed down just 1.5 percent at 6,160.52 points. The TASI plummeted 17.4 percent since resuming trading Monday following Eid holidays. Wednesday is the last trading day of the week in the Kingdom. Major central banks launched an exceptional joint effort to battle the global financial crisis on Wednesday, simultaneously slashing interest rates on three continents in a move aimed at rescuing the flagging global economy. The US Federal Reserve, European Central Bank, Bank of England and peers in Canada, Sweden and Switzerland slashed key rates by a half percentage point, sending their strongest signal of support since just after the September 11, 2001 terror attacks in the US. “We are not out of the woods yet,” warned City Index market strategist Joshua Raymond. “We will have to see whether this has any long lasting effect on confidence.” “What is good to see is the central banks making a co-ordinated and proactive effort to combat what is now a global economic problem. The fear is that this should have come about a week ago.” New York's Dow Jones Industrial Average rose 0.95 percent to 9,536.39 points around 1350 GMT, after plummeting 149.34 points in the first three minutes of trade. “The big question now is, will the buying interest be sustained or will it be seen as another opportunity to sell into strength, fueled by the thinking that the rate cut still isn't enough to change the market tone?” asked Patrick O'Hare, analyst at Briefing.com. In a turbulent day in Asia Tokyo fell 9.38 percent by the close, the biggest loss since October 1987 in the wake of the US stock market crash. The FTSE also sank earlier Wednesday after Britain's government had announced a 50-billion-pound part-nationalisation of the country's main banks as part of an emergency bailout package worth a total of 500 billion pounds. Following the emergency round of rate cuts, the London FTSE lost 4.77 percent, Frankfurt fell 4.39 percent and Paris was down 4.59 percent in late afternoon European deals. Arab stock markets tumbled for the fourth day running Wednesday. Concerns mounted about the impact of the global financial crisis on the Gulf, where the region's seven stock markets lost more than $30 billion of capitalization in the latest rout. Most regional markets closed before the announcement by the world's major central banks of coordinated interest rate cuts. Egypt's stock market also clawed back more than half of its losses to close 7.1 percent lower. The CASE-30 index, which had registered an intra-session decline of 13.4 percent, ended the day at 5,479 points. The index had lost 16.47 percent on Tuesday. In the booming Gulf emirate of Dubai, shares have lost a quarter of their worth since the trading week began on Sunday. The Dubai Financial Market sank another 8.43 percent to 3,085.02 points at close. Giant real estate developer Emaar shed 7.4 percent.
