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Wall Street plunges amid global meltdown

Wall Street shares plunged at the open Friday amid a wave of panic selling and a meltdown in share prices around the world on rising fears of a global recession.

business Updated: Oct 24, 2008 20:34 IST

Wall Street shares plunged at the open Friday amid a wave of panic selling and a meltdown in share prices around the world on rising fears of a global recession.

The Dow Jones Industrial Average slid 403.89 points (4.69 per cent) to 8,287.36 in the first 10 minutes of trade.

The Nasdaq saw a dive of 86.75 points (5.41 per cent) to 1,517.16 and the Standard & Poor's 500 index sank 50.26 points (5.53 per cent) to 857.85.

The market action came amid a wave of panic in markets around the world amid mounting evidence that major economies are heading for recession from a credit crunch and banking crisis.

"We have now reached a point where fundamentals and long-term valuation considerations do not matter any more for financial markets," said economist Nouriel Roubini at New York University.

London stocks plunged more than nine percent to a five-year low, Frankfurt crashed by 10.13 percent and Paris tumbled by more than seven percent approaching the half-way stage of trade.

In Asia, Tokyo sank nearly 10 percent, and Hong Kong tumbled as concern grew that the chronic financial crisis was taking a heavy toll on company earnings.

"There is a free fall as most investors are rapidly deleveraging and we are on the verge of a a capitulation collapse. What matters now is only flows -- rather than stocks and fundamentals -- and flows are unidirectional as everyone is selling and no one is buying as trying to buy equities is like catching a falling knife," Roubini said.

"There are no buyers in these dysfunctional markets, only sellers and panic is the ugly state of this destabilizing game."