Shares plunge as Paulson fights for rescue deal

Source: Exec Digital USA

Date :9/23/2008 5:33:26 AM

Shares in London and Asia have fallen sharply overnight as doubts continue to surround the US$700 billion US government financial bailout.

In London the FTSE 100 index dropped more than 100 points in morning trading to 5,143.05 after losing 75 points yesterday.

The MSCI index of Asia-Pacific shares - excluding Japan, which is closed for a holiday - fell nearly two percent while Australia’s benchmark S&P/ASX 200 index ended down 1.9 percent at 4,923.5.

Hong Kong’s Hang Seng index also closed down 3.87 percent at 18,872.85.

These dramatic falls follow growing doubts about whether a US$700 billion government financial bailout will be able to shore up confidence in America’s economy, as it slips further into recession.

The bailout, spearheaded by Henry Paulson, US Treasury Secretary, would allow the US Treasury to buy ‘toxic mortgage-backed assets’, but it has faced strong opposition from members of Congress about how to pay for the plan.

Paulson is expected to argue his case on Capitol Hill today, September 23. He believes that without the speedy rescue package the American banking system faces ‘meltdown’.