Korban-korban berjatuhan

Merrill Lyinch led the fallers as the bank tumbled nearly 8 per cent, extending its drop over two days to 14 per cent

Among the fallers, Fortis dropped 4.4 per cent, Washington Mutual lost 7.4 per cent and Citigroup closed 2 per cent down after rallying from earlier losses.

Barclays was another prominent faller, dropping nearly 6 per cent when it was hit by rumours that it had approached the Bank of England for funding. The central bank later denied it had made any emergency loans.

Also hit hard were the specialist insurers of bonds and structured credit amid worries that they could be among the next casualties of the credit squeeze, triggering broader systemic problems. Ambac, a sector leader, dropped 20.5 per cent.

However, the broader US market rallied after early weakness with the S&P 500 index finishing 0.08 per cent up after a rally in technology stocks. In Europe, the FTSE 100 fell 0.8 per cent, making a loss of 2 per cent for the week.

Investors were pricing in 80 per cent odds of another US rate cut by the end of the year on futures markets.

Baca selengkapnya FT