Europe's markets in a spin as Lehman collapses

15 September 2008 10:37  [Source: ICIS news]

LONDON (ICIS news)--European stocks plummeted in early trading on Monday as US investment bank Lehman Brothers said it will file for bankruptcy and Bank of America agreed to buy struggling brokerage firm Merrill Lynch.

 

London’s FTSE 100 shares index fell 3.5% (8:50 GMT) from Friday’s close, while Germany’s DAX was trading down 3.6%.

 

Dow Jones Stoxx Chemicals index, which includes Europe’s major publicly traded chemicals companies, also dropped about 3.5%, with BASF and Rhodia the biggest fallers.

 

One of the world’s biggest investment banks, Lehman Brothers, became Wall Street’s latest credit crunch casualty, announcing it was filing for bankruptcy in one of the worst banking collapses in history.

 

Bank of America agreed to buy Merrill Lynch in a $50bn (€35bn) deal, saving it from a similar fate and creating the world’s largest financial services company.

 

The backlash from Wall Street was also felt in Asian markets. In Taiwan, the benchmark share index closed down 4%, and in India share prices fell by more than 5% on opening.

 

Several of Asia's other major stock exchanges were closed for holidays.

 

($1 = €0.70)

 

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By: Mark Watts
+44 20 8652 3214

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