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New York - Global stock markets have had one of its most turbulent days ever. The Dow Jones industrials plunged nearly 1 000 points in half an hour amid concerns that Greece's debt problems could halt the world financial recovery.
The Dow has managed to recover two-thirds of its losses and close down 347 at 10 520. But all the major indexes lost 3% in a day that recalled the market turmoil of the 2008 financial crisis.
There were reports that a technical glitch hastened the selling. Even so emotions are running high. Traders are concerned that Greece's economic problems will hurt other European countries and ultimately, the US recovery.
The Standard & Poor's 500 index is off 37 at 1 128. The Nasdaq composite index is off 82 at 2 319.
The European Central Bank disappointed investors by failing to announce fresh measures to help stem the Greek debt crisis. Jean-Claude Trichet, the ECB president, said the central bank did not discuss the outright purchase of European sovereign debt as some investors had hoped for. The ECB gave verbal support to Greece's savings plan.
The MSCI's all-country world stock index tumbled 3% to 287.42, with investors stepping up sales as Greek lawmakers approved a €30bn austerity bill that paved the way for a bailout by the European Union and International Monetary Fund.
As Greek lawmakers voted, thousands of protesters massed outside parliament. Riot police fired tear gas as some protesters hurled bottles and stones and set garbage cans on fired.
"It's just fear-based selling," said Keith Springer, president of Capital Financial Advisory Services in Sacramento, California. "It started out as a catalyst for a market that was deeply overbought. It's a silly, fear-based decline. ... People are looking at Greeks throwing bricks and Molotov cocktails."
In currency markets, investors flocked to the safety of the US dollar.
"Nothing short of a sensational announcement can help the euro at this point. And that certainly did not come from Trichet," said Kathy Lien, a director for currency research at GFT, in New York.
After dropping to $1.2523, the euro was down 1.5% at $1.2622, its lowest since March 2009.
The euro has slumped about 5% against the dollar this week and is down almost 12% year to date.
As Greece struggles to consolidate its budget, fears have grown over the effect of the crisis on the more vulnerable members of the euro zone.
"Many expect that Portugal and maybe Spain will follow in Greece's footsteps and need a bailout from the European Union," said John Doyle, foreign exchange strategist at Tempus Consulting in Washington.
Local gyrations
The rand also slid on euro weakness on Thursday and government bonds were battered by concerns over sovereign debt as fears grow about the Greece crisis spreading across Europe.
Local stocks also fell along with markets globally, although losses were tempered by strong metals prices and the weaker rand that helps boost exporters' earnings.
The rand was trading at 7.77 against the dollar at 18:00, nearly 2% weaker than its previous close in New York and just off a new two-month low of 7.7850 hit late in a volatile session.
Traders said the rand would likely remain under pressure, in line with other riskier assets while the euro zone debt crisis continues to push investors to safer options, like the dollar.
"Volatility is the apt word for today, it been crazy with the euro being the main driver again ... due to the issues surrounding Greece," Bidvest Bank chief dealer Ion de Vleeschauwer said.
"It's a bit of a mess at the moment. There is no trend, as things appear on screens the market reacts violently," he said.
The South African volatility index, which measures investor risk aversion, is at its highest level since mid-July last year.
The blue-chip top-40 index fell 0.39% to 24 520.76, its fifth straight loss. The index is now down nearly 2% for the year. The All-Share index fell 0.38% to 27 512.83.
Declines by heavyweights such as MTN Group and Liberty Holdings outweighed the advances by some gold firms, which have benefited in recent sessions from gold's safe-haven status.
- AFP, AP and Reuters
