It is reported that more than USD 17 trillion has been wiped off global stock markets since the peak in October 2007.
The MSCI World extended its longest losing streak since February and bringing the weekly slump to 5.6%. The measure is down 20% in 2008 as sub prime related losses at global banks topped USD 500 billion and the global economy cooled.
Financial stocks have led the rout, with a measure for the industry in the MSCI World dropping 29% this year. Banks from UBS to Citigroup had to raise more than USD 360 billion in capital after contagion from the sub prime mortgage crisis in the US eroded earnings. Europe's Stoxx 600 Index retreated 1% as shares of STMicroelectronics NV and J Sainsbury also fell. The MSCI Asia Pacific Index sank 1.9%.
The MSCI Asia Pacific Index has tumbled 26% in 2008, almost twice the drop in the Standard & Poor's 500 Index, as a global slowdown cuts demand for the region's exports and financial companies post losses and write downs stemming from the credit crisis. Sony Corp fell 4.2% after announcing a worldwide computer recall. Sumco Corp tumbled 11% after second quarter profit decreased. Hong Kong's Hang Seng Index fell below 20,000 for the first time since April 2008 as Sun Hung Kai Properties Limited declined 6.1% following a cut in the city's growth forecast by Goldman Sachs.
India's benchmark stock index fell the most in two weeks, led by software exporters, as rising jobless claims in the US deepened concerns that growth in the world's biggest economy is stalling. The Bombay Stock Exchange's Sensitive Index fell 415.27 or 2.8% to 14,483.83. The S&P CNX Nifty Index on the National Stock Exchange declined 95.45 or 2.2% to 4,352.30.
Thailand's SET Index fell 9.05 or 1.4% to 645.80 at the close, the lowest since January 12th 2007, while Malaysia's Kuala Lumpur Composite Index declined 14.52 or 1.3% to close at 1,070.54. The measure fell 2.7% this week, its biggest retreat since the five days ended August 8th 2008. Singapore's Straits Times Index dropped 51.84 or 2% to 2,574.21, its lowest close since October 4th 2006. The benchmark gauge dropped 6.1% this week, its largest weekly drop since the five days ended August 17th 2007.
This week's drop in the MSCI World follows a 1.6% retreat in August 2008 that was led by metals producers on concern slowing demand for the raw materials is undermining the earnings capacity of the companies.
