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CAC40, suspended as share prices collapse |
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Wednesday, 08 October 2008 |
A dramatic slide in top French share prices forced the authorities to suspend the index of top shares.
Euronext, the operators of the Paris stock exchange, twice suspended share trading at 9.59am and at 1pm on Wednesday October 8 in the forty leading quoted French companies. According to spokeswoman Frédérique Vergezzi, they were applying the 15-minute rule that comes into effect when 35% of the index falls or rises by more than 5% at any one time. The first suspension allowed operators of the exchange to calculate and confirm the massive sales orders that had caused the market to drop over 8% on opening.
The heavy falls followed big overnight drops on Asian exchanges overnight and the biggest one-day drop in the CAC 40 the previous Monday. The second suspension resulted from dramatic rises after the joint announcement by the world’s six leading central banks that they were unexpectedly cutting interest rates together by half a per cent. The current volatility of the index is indicated by its biggest rise of 9.27% as recently as 19th September this year.
Shares not quoted in the CAC40 were allowed to continue trading uninterrupted throughout the day. The CAC 40 is updated every 30 seconds from 9 o'clock in the morning until five thirty in the evening. There is a pre-opening period from seven fifteen in the morning until nine o'clock when orders can be placed but not traded.
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