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Shares hit by US banking crisis

Monday 15 September 2008

Thomson Reuters shares fell rapidly in London on Monday in an immediate response to the US banking crisis. At mid-morning the shares were down 120 pence to 1,399 pence - a fall of nearly 8 per cent - on the expectation that the company will see sales of its financial news and trading terminals plummet as its banking clients collapse or merge.

The FTSE-100 index of leading shares was down 1.89 per cent at 5,218.10.

Lehman Brothers filed for Chapter 11 bankruptcy protection, making it the largest and highest-profile casualty of the global credit crisis. The 158-year-old investment bank is one of the biggest financial services firms to collapse since 1990 when Drexel Burnham Lambert filed for bankruptcy protection.

Merrill Lynch agreed to sell itself to Bank of America for about $50 billion to avert the deepening crisis.

Financial institutions worldwide have recorded writedowns and credit losses of more than $500 billion as the US sub-prime mortgage crisis has spread to other markets. ■