Tags: Attack | Aftermath | Shakes | World | Economy

Attack Aftermath Shakes World Economy

Wednesday, 12 September 2001 12:00 AM

The New York Stock Exchange, the American Stock Exchange, Nasdaq and the New York Mercantile Exchange normally set the direction for world markets, but they were closed Tuesday after two planes were flown into the World Trade Center, a major center of U.S., and world, finance and business.

Also, civil aviation remains grounded in the United States, at least until 3 p.m. Wednesday, causing a broad-scale economic ripple effect. Without guidance from New York and the world economy teetering toward recession, international markets were sharply off early Wednesday with analysts describing the stock selloff and subsequent turn to items such as gold and oil as panic sales and buys.

Stock market historian David Schwartz told the British Broadcasting Corp. there was little guidance for what to expect. "Pearl Harbor happened on a Sunday and the Gulf War was a build-up over many months," he said. "There never has been a shock like this for the financial markets."

Central banks around the world pledged additional funds to keep the various economies liquid, with the increased money supply expected to translate into cheaper loans to help affected companies get through the crisis. Still, the dollar was weakened against all other major currencies.

Tokyo again reached lows not seen since 1984, dropping 6.6 percent to slip below the 10,000 level and close at 9,610. The Korea index showed a 12-percent drop while Hong Kong's Hang Seng was off some 10 percent. In Europe, prices started down but had come back some by midsession. Still, the major indexes were all off, with France's Cac 40 down 4.5 percent; Germany's Dax down 1.3 percent and Britain's FTSE marginally lower.

Investors were apparently pulling out of the shakier stock markets for the relative solidity of commodities, with gold and oil getting much of the attention.

With U.S. analysts predicting that dissident Saudi millionaire Osama bin Laden played a hand on the attacks, interest in oil futures were predicted. Tokyo oil prices quickly hit daily limits and were up to $31 a barrel - an increase of nearly 25 percent.

London, which saw prices surge on Tuesday, settled in at $28.63 a barrel, marginally lower. Gold, long the cove of choice in stormy markets, went up to $282.60 an ounce in Asia, representing a 4 percent gain. In Johannesburg, South Africa, prices reached $292.90 an ounce on Tuesday.

Copyright 2001 by United Press International. All rights reserved.

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The New York Stock Exchange, the American Stock Exchange, Nasdaq and the New York Mercantile Exchange normally set the direction for world markets, but they were closed Tuesday after two planes were flown into the World Trade Center, a major center of U.S., and world,...
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2001-00-12
Wednesday, 12 September 2001 12:00 AM
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