Savers despair for jobs and pensions as markets mauled
LONDON/SYDNEY (Reuters) - Fears that a possible U.S. recession would rock the rest of the world and cost jobs intensified on Tuesday for small investors left counting the cost to pensions and savings from sliding global stock markets.
Hundreds of billions of dollars of value has been wiped from world share markets in two days of volatile trade that have seen some of the most dramatic falls since September 11, 2001 -- falls that underline intense concern over soaring food and fuel costs, record levels of personal debt and faltering job security.
"It's frightening," Paul Henderson, a 54-year old manager of a clothing store in London's Fleet Street, told Reuters.
He said business had already been trailing off and his customers were increasingly using cash instead of credit cards -- implying lower value purchases.
A hit to spending was also on the mind of a bartender in Frankfurt in a pub near the city's wealthy banking district.
"If the economy turns worse maybe people here will not drink so much," said the Cuban-born bartender who asked not to be identified as she is officially unemployed.
Meanwhile those already in official work and hoping for lucrative international assignments were also feeling the pinch of a deteriorating economic and market outlook.
"We are noticing a lot of clients putting off assignments. There will be an impact but no one knows how deep," said David Sayers, a 43 year-old international tax advisor based in London.
Newspaper headlines around Europe were full of plunging markets and crashing prices compounded an already grim mood extending from Asia to the Americas.
"I just feel sick, very sick," said retired IT manager Peter Hurst, 61, from Melbourne, who relies on investment income as well as his pension and was forced -- with every other investor -- to watch as Australia's key stock index suffered its biggest one day fall ever on Tuesday, sinking seven percent.
TORRID DAY, FED SURPRISES
A torrid day in Tokyo saw Japan's benchmark Nikkei 225 index experience its worst one day loss since September 11, 2001, losing $225 billion of value in the process, while Asia-Pacific stocks outside of Japan fell as much as 8 percent with India crashing nearly 13 percent at one point.
A surprise interest rate cut of a hefty 75 basis points by the U.S. Federal Reserve eased some tension, helping London's benchmark FTSE 100 share index recover lost ground to end the day 3 percent higher and supporting the pan-European FTSEurofirst 300 index index of blue chip shares.
But few market professionals were willing to stick their necks out and call an end to the burgeoning bear market.
"Rather than instilling confidence into the markets I think it will just throw in more panic, so we'll get a short-term rally, followed by (which) most of the equity markets are going to get an absolute hosing again," said Neil Parker, market strategist at Royal Bank of Scotland.
Those not actively invested were counting their lucky stars for not getting caught in this latest round of market turmoil.
"It doesn't affect me personally, not this time," said Martin Klein, a 59-year-old construction engineer, who said he had lost 10,000 D-marks (just over 5,000 euros, or $7,250) when the technology bubble burst almost 10 years ago and no longer holds any savings in shares.
"This market is deadly -- you'd better stay out of it," warned retired sales manager Peter Chan, 64, who sat with other stock punters at a brokerage in bustling central Hong Kong.
Hong Kong's Hang Seng Index ended 8.65 percent lower, its worst one-day loss since September 2001, while the Shanghai Composite Index lost more than 7 percent.
"I've been in this market since the 1980s and I've seen four crashes. The worst happened in the 1980s, when I lost all my money and my wife went away with my kids," added Chan, who said he'd already sold his stockholdings.
Others tried to put a brave face on the market slump.
"Definitely, I'm nervous and it's a bit concerning for a retiree like me. But I think the market will bounce back," said 59-year-old Sydney retiree David Lindeman.
And some were just happy to let the markets pass them by.
"I don't know anything about stock markets. I have a lot more things to worry about in life," said 28-year old London barman, James Bryce.
(Additional reporting by Alison Leung and AnneMarie Roantree in Hong Kong, Baker Li and Faith Hung in Taipei; Baizhen Chua, Wei Xin and Melanie Lee in Singapore; and Victoria Thieberger in Melbourne; Editing by Jonathan Standing, Ian Geoghegan, Tony Munroe and Nick Edwards; Editing by Ron Askew)
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