Published Wednesday, September 12, 2001, in the Akron Beacon Journal.

Overseas stock markets plunge

Oil and gold soar in reaction to attacks in America. Investors dump shares of insurance companies and airlines. London Stock Exchange is evacuated BY BRUCE STANLEY Associated Press

LONDON: Shocked investors sent European share prices sharply lower and panic buying caused oil and gold prices to soar in response to the apparent terrorist attacks yesterday in New York and Washington.

The London Stock Exchange evacuated its headquarters in the city's financial district as a precaution against a possible attack, although a spokesman said trading was continuing at an undisclosed alternative site.

The International Petroleum Exchange suspended trading of crude oil and refined products for an hour to catch up on an unusually heavy volume of transactions, while gold trading on the city's bullion market fizzled earlier in the afternoon.

Investors dumped shares on all major regional stock markets on news of the attacks, and stocks -- already battered from several days of heavy selling -- plunged further through the afternoon. Among the biggest losers were stocks in insurance companies and airlines, after hijacked passenger planes plowed into both towers of the World Trade Center.

``It's a disaster. It throws the whole market background into chaos. . . . Banks, insurers will fall the most -- anything that's exposed,'' said Mike Lenhoff, a portfolio strategist at London brokerage Gerrard.

``The tragedy postpones recovery and continues to put pressure on corporate profits,'' he said.

The FTSE 100 index of British blue-chip shares closed down 5.7 percent from Monday's close to 4,746.0. British Airways, which canceled its remaining flights to the United States after the attacks, was the biggest loser on the London exchange, diving 21 percent.

The Deutsche Boerse's Xetra DAX index of leading German shares plummeted as much as 11.4 percent lower before recovering somewhat to close the day 8.5 percent lower at 4,273.53.

The Paris Stock Exchange's CAC 40 index tumbled 7.4 percent to 4,059.75.

The Mib30 index in Milan, Italy, finished the day at its lowest closing level since Oct. 17, 1998 -- down 7.7 percent at 29,112. Trading of 10 Italian stocks, including Pirelli, Telecom Italia and Banca Fideuram, was suspended after they neared a loss limit of 10 percent for the day.

European insurance companies, some of which would face damage claims from the attack, fell sharply in Europe. In Zurich, Swiss Re shares fell 13 percent, Baloise declined 11.1 percent and Swiss Life slipped 7.8 percent.

The world's largest reinsurance company, Munich Re of Germany, said it too could face large claims. ``But the group is adequately prepared to bear such events even of this dimension,'' company spokesman Rainer Kuppers said.

Contracts of North Sea Brent crude oil for October delivery shot up $3.60 to $31.05 per barrel on the International Petroleum Exchange, before the exchange suspended trading for a half hour. The suspension was later extended to an hour, as staff struggled to process the large volume of trades booked after the spate of bombings. The October Brent price settled back to finish at $29.06 a barrel after trading resumed.

The IPE took 110,378 orders until it suspended trading in midafternoon. By contrast, traders placed 70,230 orders for all of Monday, IPE spokeswoman Jenny McLaughlin said.

OPEC would do its part to keep oil prices stable, said the organization's secretary general, Ali Rodriguez. ``We will do everything possible, everything in our power, to maintain stability,'' Rodriguez said in a radio interview in Caracas, Venezuela.

Gold surged along with oil. Trading grew thin after the Comex division of the New York Mercantile Exchange closed in the United States.

``Some trading houses decided to stop quoting at that point,'' said Suzanne Capano, a spokeswoman for the London Bullion Market Association, an industry group of gold traders.

The price of gold was later fixed at $287 per troy ounce -- a jump of $15.50 from Monday afternoon.

Trading on the London Stock Exchange continued at an unspecified location after LSE evacuated its headquarters building, Exchange Tower, in the heart of London's financial district.

``In response to events unfolding in the U.S., the London Stock Exchange is evacuating Exchange Tower as a precaution. We have contingency arrangements in place, which means that we will continue to run the market through to the close,'' spokesman John Wallace said.

He refused to say for how long the exchange planned to operate at its temporary location.

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-- Martin Thompson (mthom1927@aol.com), September 12, 2001