Tag london crash

You're referring to the London crash of 1987!

The London crash, also known as Black Monday, occurred on October 19, 1987, when the stock markets in London and other major financial centers around the world experienced a sudden and severe decline in stock prices. The crash was triggered by a combination of factors, including a global economic downturn, high interest rates, and a surge in oil prices.

Here are some key facts about the London crash:

  1. Market collapse: The London Stock Exchange's FTSE 100 index plummeted by 10.8% in a single day, wiping out £3.8 billion (approximately £12.5 billion or $16.5 billion in today's money) from investors' portfolios.
  2. Global impact: The crash was not limited to London. Stock markets in New York, Tokyo, and other major financial centers also experienced significant declines, with the Dow Jones Industrial Average falling by 508 points (22.6%) on the same day.
  3. Causes: The crash was attributed to a combination of factors, including:
    • High interest rates, which made borrowing more expensive and reduced consumer spending.
    • A global economic downturn, which led to reduced demand for goods and services.
    • A surge in oil prices, which increased production costs and reduced corporate profits.
    • Program trading, which allowed computers to rapidly buy and sell stocks, exacerbating the market decline.
  4. Recovery: The London market recovered relatively quickly, with the FTSE 100 index regaining its pre-crash levels within a few months. However, the global economy took longer to recover, with many countries experiencing a recession in the late 1980s and early 1990s.

The London crash of 1987 was a significant event in financial history, highlighting the importance of market regulation, risk management, and investor education.